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NS&I cancels cuts to Premium Bonds and savings rates – is there a better way to save?

NS&I has cancelled planned cuts to Premium Bond prize and savings rates. We look at how savers can currently get a better rate through HL Active Savings.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

NS&I has cancelled the cut in the Premium Bond prize rate and reductions in variable rate savings, which were due on 1 May. Cuts to fixed rate savings will still go ahead.

Part of the NS&I’s remit is to balance the needs of savers with the demands of the Treasury. Clearly, it has decided that savers need all the help they can get at the moment.

Premium Bonds are a national treasure, and can be a useful place to keep your emergency savings. It’s easy to get hold of your cash, they offer the chance of a prize, and there’s the glimmer of a hope that your sensible safety net will win you one million pounds. And the decision to cancel this cut means the odds remain at – an admittedly pretty long – 24,500 to one.

It’s not all good news though. Cuts to NS&I fixed rate bonds are still going ahead.

Even the most committed NS&I savers might think twice before opting for one of these bonds.

You might be able to do far better elsewhere, so it’s well worth shopping around.

Which NS&I cuts aren’t going ahead?

Account Current rate (AER)
Direct Saver (easy access) 1%
Investment Account 0.8%
Income Bonds 1.16%
Premium Bonds 1.4% (odds of 24,500 to one)

Which NS&I cuts are going ahead?

Account Current rate (AER) Rate from 1 May
Guaranteed Growth Bonds (1 year) 1.25% 1.1%
Guaranteed Growth Bonds (2 years) 1.45% 1.2%
Guaranteed Growth Bonds (3 years) 1.7% 1.3%
Guaranteed Growth Bonds (5 years) 2% 1.65%
Guaranteed Income Bonds (1 year) 1.21% 1.06%
Guaranteed Income Bonds (2 years) 1.41% 1.16%
Guaranteed Income Bonds (3 years) 1.66% 1.26%
Guaranteed Income Bonds (5 years) 1.97% 1.61%
Fixed interest savings certificates (2 years) 1.3% 1.15%
Fixed interest savings certificates (5 years) 1.9% 1.6%

A better home for your savings

Active Savings lets you choose savings products from a range of different banks and building societies offering great rates, all through one online account.

There’s easy access and fixed term savings to choose from, some of which are exclusive to HL.

Correct as at 20/04/20. Rates available through Active Savings can be withdrawn at any time.

  • Six month fix at 1.45% EPR*
  • Six month fix at 1.4% AER/Gross*
  • One year fix at 1.65% EPR*
  • Two year fix at 1.75% EPR*
  • Five year fix at 2% EPR*

*Expected profit rate (EPR): Islamic banks offer an expected profit rate, rather than interest on their savings products, in order to comply with Sharia banking principles.

Eligible deposits through Active Savings are covered up to £85,000 per banking license by the Financial Services Compensation Scheme. Find out more

Improve the way you save, for the better. You can try Active Savings from as little as £1.

DISCOVER ACTIVE SAVINGS

This article isn't personal advice, but could help you make your own decisions so you can make more of your money. If you are unsure of the suitability of a product for your circumstances, please ask for advice. Inflation reduces the future spending power of money. Fixed term products generally only allow access to funds at maturity. Please note that interest from Active Savings products is paid gross and counts towards your Personal Savings Allowance. You are responsible for paying any tax due on interest that exceeds your Personal Savings Allowance to HM Revenue and Customs.

*AER (Annual Equivalent Rate) shows what the interest rate/expected profit rate would be if it was paid and compounded once each year. It helps you compare the rates on different savings products.

Gross means the interest rate without any tax deducted. Interest/profits are paid gross. You are responsible for paying any tax due on interest that exceeds your Personal Savings Allowance to HM Revenue & Customs. Tax treatment can change.

Expected profit rate – Islamic banks offer an expected profit rate, rather than interest on their savings products, in order to comply with Sharia banking principles.

The Active Savings service is provided by Hargreaves Lansdown Savings Limited (company number 8355960). Hargreaves Lansdown Savings Limited is authorised by the Financial Conduct Authority under the Payment Services Regulations 2017 with firm reference 751996 for the provision of payment services. Hargreaves Lansdown Asset Management Limited and Hargreaves Lansdown Savings Limited are subsidiaries of Hargreaves Lansdown plc (company number 2122142).


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Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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