Hope for savers as NS&I bank boosts rates for 1.5million people

Finally! A glimmer of hope for savers as National Savings and Investment bank boosts rates for 1.5million people

  • NS&I doubled rates on many of its most popular accounts helping 1.5m savers
  • Treasury-backed bank’s Direct Saver pays 1.2% up from 0.5% for 340k savers
  • NS&I was under fire this year for failing to do enough to help English savers
  • Savers will get a ‘significant boost’ in cost-of-living crunch, says finance expert

Around 1.5million savers will get a much-needed boost after NS&I puts up its interest rates.

National Savings and Investments (NS&I) yesterday doubled the rates on many of its most popular accounts.

The Treasury-backed bank’s Direct Saver now pays 1.2 per cent, up from 0.5 per cent.

More than 340,000 savers who hold a total of £31billion in the easy-access account will earn an overall extra £216million in interest a year as a result.

A further 260,000 customers with NS&I Income Bonds saw their rate rise by the same amount and will pocket £130million more in interest a year.

Around 1.5million savers will get a much-needed boost after NS&I puts up its interest rates

NS&I have doubled interest rates across some of its most popular savings accounts

The rate paid by NS&I’s Direct Isa rose from 0.35 per cent to 0.9 per cent.

And around 80,000 under-18s with Junior Isas will now earn 2.2 per cent, up from 1.5 per cent.

This is the first rate increase that children have benefited from since November 2020.

NS&I came under fire earlier this year for failing to do enough to help struggling savers despite five consecutive Bank of England base rate rises.

It saw a mass exodus of savers after slashing its rates during the pandemic. The bank is still not offering the very best deals on the market but its accounts are far more generous than high street banking giants.

It will also raise the rate of its fixed-rate Guaranteed Growth and Guaranteed Income Bonds and its Fixed Interest Savings Certificates from August 1.

NS&I’s one-year Guaranteed Growth Bond rate will jump from 0.1 per cent to 1.85 per cent.

The two-year version will go up from 0.15 per cent to 2.25 per cent and the three and five-year bonds will pay 2.55 per cent.

The Premium Bond prize fund remains the same after the odds of winning improved from 34,500 to 1 to 24,500 to 1 in June. And around 1.5million savers in its Investment Account will still earn a miserly 0.01 per cent.

Laura Suter, head of personal finance at investment firm AJ Bell, said: ‘The war is hotting up in the savings market, as rates start to rise and savers can finally start to get decent returns on their money.

‘The increases mean that NS&I savers will get a significant boost that will be welcomed in the current cost of living crunch.’

Ian Ackerley, chief executive of NS&I, added: ‘NS&I is one of the largest savings organisations in the UK and we’re pleased to increase our interest rates.’

  • As many as one in three households face fuel poverty with a new surge in energy bills in the autumn. The fuel price cap is set to rise by about £260 to £3,245 from October 1, with another increase to £3,364 from January 1, analyst Cornwall Insight estimates. The charity National Energy Action claims this would plunge 8.2million into fuel poverty, which is based on a household spending more than 10 per cent of total income on energy. Its chief executive Adam Scorer said: ‘Anticipated prices far exceed earlier projections. Current financial support will be inadequate as much of that money will be spent before winter kicks in.’

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