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| Version 5 | Version 6 |
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| NS&I cuts interest rates on leading accounts | NS&I cuts interest rates on leading accounts |
| (5 months later) | |
| National Savings and Investments (NS&I) is cutting interest rates on three of its leading accounts by up to 0.5% – affecting almost 600,000 people. | National Savings and Investments (NS&I) is cutting interest rates on three of its leading accounts by up to 0.5% – affecting almost 600,000 people. |
| It is reducing the rate on its tax-free Direct Isa from 2.25% to 1.75%, while the Direct Saver rate will fall from 1.5% to 1.1% gross. Meanwhile, those holding its income bonds will see their rate cut from 1.75% to 1.25% gross. | It is reducing the rate on its tax-free Direct Isa from 2.25% to 1.75%, while the Direct Saver rate will fall from 1.5% to 1.1% gross. Meanwhile, those holding its income bonds will see their rate cut from 1.75% to 1.25% gross. |
| The new rates will take effect from 12 September 2013. | The new rates will take effect from 12 September 2013. |
| NS&I blamed rival savings institutions for cutting their rates, saying it had taken the decision following a regular review of the savings market, which includes an analysis of the rates payable on comparable accounts. | NS&I blamed rival savings institutions for cutting their rates, saying it had taken the decision following a regular review of the savings market, which includes an analysis of the rates payable on comparable accounts. |
| Jane Platt, NS&I's chief executive, said: "Rates across the savings market have fallen over recent months, and to ensure we continue to strike a balance between the needs of our savers, taxpayers and the stability of the broader financial sector, we have taken the difficult decision to reduce the rates on our Direct Isa, Direct Saver and income bonds accounts." | Jane Platt, NS&I's chief executive, said: "Rates across the savings market have fallen over recent months, and to ensure we continue to strike a balance between the needs of our savers, taxpayers and the stability of the broader financial sector, we have taken the difficult decision to reduce the rates on our Direct Isa, Direct Saver and income bonds accounts." |
| According to the most recent figures, these three accounts are held by around 326,000, 53,000 and 209,000 people respectively. | According to the most recent figures, these three accounts are held by around 326,000, 53,000 and 209,000 people respectively. |
| NS&I said it would be writing to those affected at least 60 days in advance of the changes. | NS&I said it would be writing to those affected at least 60 days in advance of the changes. |
| Danny Cox, head of financial planning at IFA firm Hargreaves Lansdown, said savers were increasingly being faced with below-inflation returns on their cash, or having to take risks in the markets. | Danny Cox, head of financial planning at IFA firm Hargreaves Lansdown, said savers were increasingly being faced with below-inflation returns on their cash, or having to take risks in the markets. |
| "Higher-rate taxpaying savers shouldn't ignore NS&I premium bonds as an alternative to a savings account where after-tax cash returns are paltry – a top rate easy access 1.75% gross is 1.05% net for a higher rate taxpayer and 0.96% for a top rate taxpayer. | "Higher-rate taxpaying savers shouldn't ignore NS&I premium bonds as an alternative to a savings account where after-tax cash returns are paltry – a top rate easy access 1.75% gross is 1.05% net for a higher rate taxpayer and 0.96% for a top rate taxpayer. |
| "In some cases investors should forgo the guarantee of a small amount of interest they will receive from taxable savings and invest in premium bonds, with the hope of winning tax-free prizes of at least the same amount as they would have earned in after-tax interest. There is a chance of winning more and, of course, one person will win the monthly £1m prize." | "In some cases investors should forgo the guarantee of a small amount of interest they will receive from taxable savings and invest in premium bonds, with the hope of winning tax-free prizes of at least the same amount as they would have earned in after-tax interest. There is a chance of winning more and, of course, one person will win the monthly £1m prize." |