Just three weeks after I told readers to put their money into National Savings and Investments (NS&I), it cut its rates from the best available to the worst. The advice for most people now is move your money before the cuts happen on 24 November.
The return on its market-leading income bonds – which are in fact an instant access savings account – will be slashed from 1.15% to 0.01%. If you have £10,000 in there, you currently get £115 a year. In future it will be just £1. This will devastate the incomes of millions of people.
The investment account plummets from 0.8% to 0.01%; Direct Saver from 1% to 0.15% and the Direct ISA from 0.9% to 0.1%. Even children are not spared. The
market-leading Junior ISA more than halves from 3.25% to 1.5%. People who had fixed-term deals from the past will also see their rates cut to the bone if they want to renew them at the end of the term.
Premium bonds will not escape. From the December draw, the rate of interest that forms the monthly prize fund drops from 1.4% to 1% and the chance of winning is reduced by more than a quarter. The two monthly prizes of £1,000,000 remain, but overall there will be a million fewer prizes each month.
NS&I is also saving money by moving to paperless statements. Anyone registered for the online service who has an email address is being automatically converted to
receive statements and documents online, though at the moment they can opt back in to get paper statements posted to them. It is also phasing out the warrants – or cheques – for premium bond prizes. From March they will disappear for everyone, with all prizes either reinvested in bonds or paid into a bank account.
You have just over a month to move your money somewhere better. Use savingschampion.co.uk to find the best rates. More on what to do with your savings next week.
Paul Lewis presents Money Box on Radio 4