NS&I slashes rates

19 February 2009 12:15am

National Savings & Investments (NS&I) is cutting interest on its variable-rate saving products by up to 0.75%.

The fresh blow to savers comes after Bank of England policymakers slashed rates to an all-time low of 1% two weeks ago.

Under the new rates, returns on NS&I's cash ISA fall from 1.4% to 0.9%.

Rates on its easy access accounts have fallen by 0.5% for savers with £25,000 or more, while those with less than £10,000 now receive just 0.3% interest after a 0.15% cut.

Government-backed NS&I is also cutting interest on its fixed-rate savings products by up to 1.35%. It said the move - which would not affect savers with money currently in its fixed-rate saving ranges - reflected lower yields on Government gilts since last September.

The Premium Bonds prize fund rate remains unchanged at 1.8% - the rate put in place after the Bank's cut from 4.5% to 3% last November - and will be held for at least the March 2009 draw.

November's move lower from 2.85% to 1.8% cut the total value of prizes from £87.8 million to £57 million, and the pot is likely to be cut further after March.

© The Press Association