🔔 NS&I disappoints savers

Author: Anna Bowes
31st August 2018

Another week – similar story. It’s been a month now since the base rate increased to 0.75% - yet there are still far more to providers that still need to let us know how they are going to treat us. Just 34% of providers have announced so far if they are going to play fair or not.

Base rate update

There has been a flurry of activity this week – with 11 more providers showing their wares. But there are still 91 providers who have remained silent!

So, what are the highlights and the lowlights this week?

The prize this week goes to… the Monmouthshire Building Society. The Building Society has joined the very small exclusive club that has passed on 0.25% to all accounts.

On the flip side, NS&I announced its plans this week to increase just three accounts on the 1st October – Income Bonds by 0.15% to 1.15%, Investment Account, up by 0.10% to pay 0.80% and Direct Saver is increasing by just 0.05% to 1%.

There’s no mention of an increase to the Premium Bond Prize fund!

NS&I savers will no doubt be disappointed that they will not see a full 0.25% rise on their savings accounts – in fact, Direct ISA savers will see a cut on 24th September, from 1% to 0.75%.

However, this muted response from NS&I was expected, as NS&I’s net financing target for the current tax year has reduced considerably since the beginning of 2017-18 and now stands at just £6bn.

This latest announcement follows the news in June that the amount you can invest in NS&I’s Guaranteed Growth and Guaranteed Income bonds was reduced from £1 million to £10,000 per person. They are clearly looking to stem the inflow of deposits.

The increases to the three account are comparable to most of the other increases that we’ve seen so far and compared to the paltry rates on offer from the high street banks even after the base rate rise, these accounts from NS&I look positively competitive – especially the Income Bonds.

But savers can do better.

At the moment, the best easy access accounts are offering as much as 1.35% gross/AER (for unlimited withdrawals) from Birmingham Midshires, and Coventry Building Society is still offering an account paying 1.40%, but a maximum of three penalty free withdrawals is allowed per year.

Post Office is the other popular provider to announce its plans this week. Unsurprisingly only a handful of rates increased by 0.25%. The majority of those that did increase, did so by 0.15%, so check carefully to see what your account is now paying, and whether that is competitive.

 

Provider Did all  Rates Change Lowest Increase Highest Increase Average Increase Effective Date(s)
AA - Bank of Ireland Group No 0.15% 0.15% 0.15% 01-Sep
Aldermore No 0.25% 0.25% 0.25% 31-Aug
Bank of Scotland No 0.15% 0.25% 0.22% 31-Aug
Barclays No 0.05% 0.10% 0.07% 03-Sep
Beverley Building Society Yes 0.25% 0.25% 0.25% 28-Aug
C.Hoare & Co No 0.10% 0.25% 0.18% 06-Aug
Cahoot Yes 0.15% 0.15% 0.15% 03-Sep
Cambridge Building Society No 0.05% 0.25% 0.15% 30-Aug
Cater Allen No 0.10% 0.25% 0.20% 31-Aug
Co-op Bank No 0.03% 0.25% 0.06% 30-Aug
Coventry Building Society No 0.05% 0.25% 0.17% 01-Sep
Cumberland Building Society Yes 0.15% 0.30% 0.21% 01-Sep
Halifax No 0.25% 0.25% 0.25% 31-Aug
Hanley Economic Building Society Yes 0.10% 0.15% 0.14% 01-Sep
Hinckley and Rugby Building Society No 0.10% 0.30% 0.13% 29-Aug
Holmesdale Building Society Yes 0.25% 0.25% 0.25% 01-Sep
HSBC No 0.10% 0.25% N/A 03-Sep
Kent Reliance No 0.04% 0.35% 0.21% 01-Sep
Kingdom Bank No 0.10% 0.10% 0.10% 03-Aug
Lloyds Bank No 0.15% 0.25% 0.20% 31-Aug
Manchester Building Society Yes 0.10% 0.25% 0.17% 01-Sep
Monmouthshire Building Society Yes 0.25% 0.25% 0.25% 01-Sep
National Counties Building Society No 0.03% 0.25% 0.14% 11-Sep
National Savings & Investments No 0.05% 0.15% 0.10% 01-Oct
Nationwide Building Society No 0.05% 0.25%* 0.10% 31-Aug
Natwest No 0.05% 0.25%*^ 0.16% 03-Sep
Newbury Building Society No 0.10% 0.25% 0.17% 13-Sep
Post Office No 0.15% 0.25% 0.18% 01-Sep
Progressive Building Society No 0.10% 0.25% 0.19% 10-Sep
Royal Bank of Scotland No 0.05% 0.20% 0.10% 03-Sep
Saffron Building Society No 0.10% 0.30% 0.24% 31-Aug
Santander No 0.10% 0.25% 0.18% 03-Sep
Scottish Building Society Yes 0.10% 0.20%~ 0.20% 17-Sep
Scottish Widows Bank No 0.25% 0.25% 0.25% 31-Aug
Skipton Building Society No 0.05% 0.30% 0.16% 31-Aug
Smile Yes 0.13% 0.28% 0.21% 30-Aug
Swansea Building Society Yes 0.25% 0.25% 0.25% 01-Oct
The Access Bank Yes 0.20% 0.20% 0.20% 01-Sep
The Family Building Society No 0.10% 0.25% 0.19% 11-Sep
TSB Bank No 0.10% 0.25% N/A 01-Sep
Ulster Bank No 0.10% 0.10%* 0.11% 03-Sep
United Trust Bank No 0.25% 0.25% 0.25% 08-Aug
*Help to Buy ISA will increase by 0.50% to 2.50%        
^Regular Saver will increase by 0.50% to 1.50%        
~Regular Saver will increase by 0.40% to 2.00%        

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