Hard-pressed savers have been given a welcome boost as the country’s biggest savings institution axed plans to reduce interest rates and cut returns on Premium Bonds.
National Savings & Investments (NS&I) was due to lower the interest rates on many variable-rate savings accounts on May 1 but has now cancelled these changes.
The interest rate on NS&I’s Direct Saver was due to fall from 1pc to 0.7pc next month, while Income Bonds would have returned 0.7pc, rather than 1.15pc.
The organisation said it wanted to ensure its savers were supported during the coronavirus outbreak.
NS&I had also planned to lengthen the odds of winning a prize from Premium Bonds from 1 in every 24,500 bonds to 1 in 26,000. The effective prize rate would have fallen from 1.4pc to 1.3pc but this change has also been cancelled.
It has encouraged all customers to disregard any letters which state that interest rates will be cut and prizes reduced.
However interest rate reductions on new fixed-rate bonds, which were also announced in February, will go ahead as planned. The changes include the interest rate on the three-year Guaranteed Growth Bond being reduced from 1.7pc to 1.4pc. However, customers have until May 1 to take advantage of the current higher rates.
NS&I also said that savers already holding Guaranteed Growth Bonds, Guaranteed Income Bonds and Fixed Interest Savings Certificates, whose investments mature on or before June 1, would also be eligible for the higher rates if they roll over their account into a new bond of the same kind.
Telegraph Money reported last week that savers have reported long waits when trying to withdraw their cash from accounts. NS&I has once again urged customers to manage their accounts online, rather than by telephone or post.