Latest news with #NationalSavings
Daily Mail
05-07-2025
- Business
- Daily Mail
I've cashed in my Premium Bonds and buying lottery tickets
I have now cashed in all my Premium Bonds. It's been a long time coming but the latest cut to the prize rate was the final straw. I've decided I'm better off with my savings elsewhere and spending £2 a week on a lottery ticket. National Savings & Investments (NS&I) announced last week it was cutting the prize rate for Premium Bonds again. The prize rate represents the return someone who is averagely lucky can expect to get. From the August prize draw it will drop to 3.6 per cent, down from the current 3.8 per cent and well below the peak of 4.65 per cent back in September 2023. It's also the second cut to the prize rate in just a few months – before April it was 4 per cent. I've had the maximum £50,000 stashed in Premium Bonds for the past 12 months, after receiving an inheritance. It seemed a good place to keep the money while I decided on a long-term plan. Each month I'd check the app for any prizes. I always know by then that I haven't won £1million, as press releases the day before reveal the region where the winners live. Occasionally, I read they are from my home region of North Yorkshire, and I hope for a phone call. In the past year, I've won £1,050, from small £25 to £100 prizes each month. That sounds great until you realise it's a return of just 2.1 per cent. Before the inheritance, I never had more than a few thousand pounds in Premium Bonds. When savings rates were low it was where I stashed the money to pay my tax bill. My biggest ever single win was £500 back in July 2021 – other than that I've never won more than £100 at a time. Usually, it's been £25 every few months. But I enjoyed it and put any winnings into my holiday account, which contributed to some memorable trips. Although that's more a weekend in the Lake District than a fortnight in the Maldives. I would have done far better if my money had been in a best-buy instant access savings account. Laura Suter, personal finance director at investment platform AJ Bell, says: 'Premium Bond rates are now significantly below the top rates in the market, meaning savers are paying a hefty premium for the safety and brand name of NS&I. 'The top easy-access account on the market pays 5 per cent interest, so someone with £20,000 would be sacrificing £280 of interest a year by sticking with Premium Bonds – and that's assuming they even get the average return, which many don't.' I certainly haven't been. NS&I is a little different to your average bank. It is backed by the Treasury and the money you deposit is lent to the Government. The Government sets fundraising targets for NS&I, and it alters its interest rates to attract more money when needed. The current target is £12 billion with a range of £4 billion above or below that. But NS&I can't just offer stonking rates to meet its targets – it isn't allowed to disrupt the wider market. 'NS&I pledges to be middle of the road, and as the road has moved into less rewarding territory, it was bound to make this cut,' says Sarah Coles, head of personal finance at investment platform Hargreaves Lansdown. But middle of the road isn't good enough for my nest egg. Especially when you remember that all-important phrase, 'averagely lucky'. In reality, the vast majority of Premium Bond holders won't be lucky at all. Research by AJ Bell shows, of the 22.7 million with bonds, 14.4 million have never won a single prize. Ever. That's because to achieve average luck with prizes that start at £25, you need to hold a decent amount. Many Premium Bond savers fall below that threshold, with only small holdings. Charlene Young, senior pensions and savings expert at AJ Bell, says: 'The chance of winning any of the top prizes, from £5,000 all the way up to £1 million, remains minuscule.' Obviously, there are some attractions to Premium Bonds – there's a reason I've held them on and off for decades. Like most, I started with some I was gifted as a child. I added to that as and when I could. When I went freelance it seemed a great place to save money ready for my tax bill. What's better than using money you owe the taxman to possibly win £1 million? And Premium Bond winnings are tax-free, but this matters more if you've maxed out your Isa allowances and tax-free Personal Savings Allowance. This is £1,000 a year if you're a basic rate taxpayer, £500 for higher rate taxpayers and nothing for additional rate payers. Your money is also safe with NS&I as it is backed by the Treasury. The dream of winning the £1 million jackpot kept me loyal to Premium Bonds for over 40 years, but it is time to accept that my chances are pitiful. There are plenty of ways my money can earn far more than 3.6 per cent and many of them don't involve any luck. Just me putting in the legwork to find the most rewarding home for my savings. So I've finally pulled the plug on my Premium Bonds. It is a wrench but I can be just as smug about my guaranteed interest instead. I've also woken up to the fact that holding £50,000 in what is effectively an instant access savings account makes no sense. If I want to make that money work, it is better split between investments, fixed-rate bonds and instant-access savings. So that's exactly what I've done. I've maxed out my Isa allowance in a stocks and shares Isa, invested in a range of income-generating funds. If you're moving from Premium Bonds to investments for the first time, Victoria Hasler at Hargreaves Lansdown suggests two lower-risk options: the Troy Trojan fund, which aims to grow money steadily with a mix of assets, and the Ninety One Diversified Income fund, which yields 4.99 per cent and is designed to cushion investors when markets fall. I have put a chunk into Cynergy Bank's two-year fixed-rate bond paying 4.45 per cent and the rest is earning 4.75 per cent in Atom Bank's Instant Saver Reward account.
Daily Mail
03-07-2025
- Business
- Daily Mail
NS&I launches new fixed-rate savings accounts - here's what's on offer
National Savings and Investments has launched a new range of fixed-rate savings bonds for those wanting to lock their money away. The Treasury-backed bank has launched new issues of its Guaranteed Growth Bonds and Guaranteed Income Bonds, collectively known as British Savings Bonds. Savers will now be able to open new two, three and five-year bonds, while NS&I has also boosted the rates it pays on its existing two and three-year bonds. New NS&I customers can open the bonds as well as existing customers whose bonds are maturing. In April, NS&I launched new issues of its one, two, three and five-year fixed rate savings accounts. It was the first time these accounts had been available with NS&I at the same time. The rates on the issues launched today have fallen from the previous issues, however, in a blow to savers seeking better returns for locking their money away. The new two-year British Savings Bonds have been cut to 3.85 per cent for both the growth and income options, previously these bonds payed 4 per cent. The three-year versions of the bonds will offer 3.88 per cent, down from the previous issue's rate of 4.1 per cent. The new interest rate on the five-year growth option is 3.84 per cent down from 4.06 per cent. There is no change to the rate on the one-year British Savings Bonds, which remain at 4.05 per cent for both the growth and income option. At the same time, NS&I is changing the rate on its Junior Isa to 3.55 per cent. This is the first time the rate has changed on the Junior Isa since August 2023, when it was 4 per cent. Andrew Westhead, NS&I retail director, said: 'Today's announcement is in response to changes in the wider market and will ensure we continue to offer a range of fixed-term options while balancing the interests of savers, taxpayers and the broader financial services sector.' How do NS&I rates compare? The rates now fall well short of the best-buy fixed rate savings deals. The top two-year fixed rate bond on the market pays 4.43 per cent and is offered by Cynergy Bank, compared to NS&I's 3.85 per cent one-year bond. Savers can also do better than NS&I's three-year bonds by keeping their cash in the best three-year fixed-rate deals This pays 4.45 per cent and is offered by JN Bank. The best five year fixed-rate account pays 4.47 per cent and is offered by Birminggam Bank. Meanwhile the NS&I Junior Isa lags behind the best buys which is currently offered by Bath Building Society and pays 4.65 per cent. What are the benefits of saving with NS&I? Savers can put between £500 and £1million into the fixed rate bonds. Unlike other savings accounts, all money is 100 per cent guaranteed by the Government. This means savers don't have to spread their money between a number of savings accounts in order to make sure it is all protected, in the event that the provider goes under. When using normal savings accounts with a bank, deposits are protected up to £85,000 per bank - so those with more money than that are advised to open multiple accounts with different institutions. NS&I typically doesn't offer the highest savings deals on the market to avoid skewing it. The Treasury-backed bank said the new bond offerings balance the interests of savers, taxpayers and the broader financial services sector. Unlike Premium Bonds, these accounts are not tax-free.
Business Recorder
02-07-2025
- Business
- Business Recorder
National Saving Schemes: CDNS lowers rates of return
The Central Directorate of National Savings (CDNS) has reduced the rates of return on a number of its National Savings Schemes (NSS) with effect from June 27, 2025, it was learnt on Wednesday. The rate of Saving Account (SA) remained unchanged at 9.50%, brokerage house Topline Securities reported. The Defence Saving Certificates (DSC) will offer a return of 11.76%, after a decline of 15bps from 11.91%. The return on Bahbood Savings Certificates (BSC) declined by 24bps to 13.20% from 13.44%. National Saving Schemes: CDNS revises rates of return downwards Meanwhile, the rates of Pensioners Benefit Account (PBA) and Shuhda Family Welfare Account (SFWA) also lowered by 24bps each, to 13.20% each. Similarly, Regular Income Certificates (RIC) will offer an 11.16% return, as compared to 11.52% earlier, a drop of 36bps. Special Savings Certificate (SSC) will now offer return of 10.6% amid a drop of 30bps. Meanwhile, the rates of Serwa Islamic Saving Account (SISA) and Serwa Islamic Term Account (SITA) also lowered by 59bps each, to 9.75% each.
The Independent
30-06-2025
- Business
- The Independent
Premium Bonds cuts prize rate again – are they still worth it?
The prize rate for Premium Bonds is set to be cut in August, National Savings and Investments (NS&I) has confirmed, bringing changes for millions of account holders. The prize fund will shrink to 3.6 per cent from August's draw, down from 3.8 per cent. It marks the third rate reduction of the year, after it was cut from 4.15 per cent to 4 per cent for January. While the odds of winning will remain the same, the cut means the estimated number of prizes up for grabs has been lowered again. Premium Bonds are an investment product offered by the government-owned NS&I. It provides savers with a unique opportunity to win tax-free cash prizes ranging from £25 to £1 million each month. Unlike traditional savings accounts, Premium Bonds do not accrue interest. Instead, the returns come solely from these prize draws. The minimum investment is £25, with a maximum holding of £50,000. The latest prize rate cut now means that there will be an estimated 75 prizes of £100,000, down from 79. Meanwhile, the number of £50,000 prizes will be reduced to 151 from 159. The number of £25,000 prizes will fall to 302 from 317, and £10,000 prizes to 754 from 792. However, the number of £1 million prizes will remain the same, at two. The number of £25 prizes is also set to increase for August's draw, with an estimated 2.56 million available, up from 2.19 million. The savings held in Premium Bonds don't accrue interest as with regular bank accounts. This has led some experts to question how viable they are for savers looking to maximise the returns on their money, especially in light of the consecutive prize rate cuts. Analysis from Martin Lewis 's Money Saving Expert site says the latest cut makes Premium Bonds 'even easier to beat elsewhere'. It says: 'For most savers with average luck, accounts that pay interest will now be even more likely to beat Premium Bonds. This is because savings interest is a guaranteed return.' Recent research from Octopus Money also found that Premium Bond holders are waiting an average of 3.5 years to win a single prize. And in nine out of ten of these cases, this prize is worth less than £2,000. This means that for most savers, a regular savings account is the most likely avenue to yield guaranteed returns, with the most competitive options currently offering around 4.75 per cent interest. Another option is to open a cash ISA, a savings account which allows tax-free deposits of up to £20,000 a year. Like Premium Bonds, a cash ISA can compete as a tax-free option, but also pays a regular and guaranteed interest rate. Andrew Westhead, NS&I retail director, said: 'This adjustment to the Premium Bonds prize fund rate – the first in four months – reflects the changing landscape for savings. 'Premium Bonds maintain their unique appeal by offering complete security backed by HM Treasury, the flexibility to withdraw easily, and the excitement of potentially winning a tax-free prize each month. The August draw is expected to deliver more than 6 million tax-free prizes worth over £396 million.'
Daily Mail
24-06-2025
- Business
- Daily Mail
Premium Bond rates are plummeting -so with easy-access Isas offering 4.5% jump ship NOW, says SYLVIA MORRIS
National Savings and Investments (NS&I) is cutting the prize fund rate on Premium Bonds – just as I predicted it would – and savers now need to seriously reconsider whether to hold on to theirs. While the prize rate is 3.8 per cent, the gap between it and the 4.5 per cent or so you can earn in an easy-access cash Isa or ordinary savings account isn't horrendous.
