Is NS&I set to slash more deals?


NS&I has been set a target of raising £6 billion between April 1 and March 31 next year. This is its lowest total for five years

NS&I has been set a target of raising £6 billion between April 1 and March 31 next year. This is its lowest total for five years

NS&I has been set a target of raising £6 billion between April 1 and March 31 next year. This is its lowest total for five years

NS&I could be forced to axe more top deals now that its targets have been slashed.

The government agency, which raises money for HM Treasury, wants to attract less from savers this year. 

National Savings & Investments has been set a target of raising £6 billion (plus or minus £3 billion each side) between April 1 and March 31 next year. This is its lowest total for five years.

Last year, when it launched new bonds and its Junior Isa, it wanted more than double this, at £13 billion.

Signs of the impact on savers are already evident. Since the start of April, NS&I has reduced the amount you can put in its popular Guaranteed Growth or Guaranteed Income Bonds from a £1 million limit to £10,000.

Its similarly named Investment Guaranteed Growth Bond, launched in April 2017, has been withdrawn from sale, with no replacement. 

The bond was announced in the 2016 Autumn Statement by Chancellor Philip Hammond as a move to support savers suffering from low rates.

More than 200,000 rate-hungry savers piled £607 million into the three-year fixed-rate bond, paying 2.2 per cent, on which deposits were capped at £3,000 per person.

Savers also poured money into Guaranteed Growth and Guaranteed Income Bonds, which went back on sale for the first time in nearly ten years at the start of December.

They quickly became its bestseller, attracting a huge £11 billion in just four months, including £7.5 billion from pensioners whose 65+ Bonds had come to the end of their term.

The three-year Guaranteed Growth option was the most popular, attracting nearly 600,000 savers.

Premium Bonds were the second-biggest seller at £5.9 billion, bringing the total to a record £75 billion.

NS&I continues its push towards a ‘digital’ age, with accounts only available online or by phone. Before it closed up shop at the Post Office in 2015, 43 per cent of its sales came by post or the High Street.

As a new saver, you can only apply for its Guaranteed Growth and Guaranteed Income Bonds online. But if you have maturing bonds with NS&I and want to reinvest for another term, you can also do so by post or phone, as long as you sign up for this service.

The Growth version pays 1.5 per cent for one year or 1.95 per cent for three years. If you want to renew your existing bond, you also have the option of 1.7 per cent for two years or 2.25 per cent for five.

Its Guaranteed Income Bonds work in the same way, but pay your interest each month. Rates are 1.45 per cent for one year, 1.65 per cent for two, 1.9 per cent for three years or 2.2 per cent for five years.

NS&I’s standard easy-access Direct Isa (paying 1 per cent) and its run-of-the-mill easy-access Direct Saver (0.95 per cent) are only available online or over the phone.

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