Home Finance NS&I responds to saver saying British Savings Bonds won't work for one...

NS&I responds to saver saying British Savings Bonds won't work for one reason

Savers have hit out at the new British Savings Bonds on offer from NS&I with one person branding the relatively low rates on offer as an “insult”.

The savings provider shared the news of the product’s launch earlier this month on X, with rates at 4.15 percent, but critics were unimpressed by the new account.

This comes just days after analysts hit out at the product as being a “fancy bit of marketing” appearing to provide a boost for Britain. In comments exclusive to Express.co.uk, they pointed out that in reality savers’ cash will go into a generic pot.

One person on X said the rate was “shocking” and should be above five percent. They said: “Nobody will invest in these total wastes of time unless you have above the £85,000 which 99 percent of folk don’t have that. Bonds for the super rich.”

The £85,000 figure most likely refers to the fact that as a standard, funds in a savings account are protected up to £85,000 under FSCS (Financial Services Compensation Scheme) rules.

A representative of NS&I said in response: “The rates on offer are around the middle of the market compared to fixed rates from other providers.

“As we are backed by HM Treasury, we offer 100 percent security for your money, however much you invest.”

The person was not convinced by this explanation, responding: “The middle isnt good enough and these bonds will be a flop. NS&I are using our money on the cheap to bail the Government out, it’s an insult.”

NS&I provided another response to their criticism, saying: “We aim to offer fair rates to savers and provide cost effective finance for government, while not disrupting the wider savings market.”

The saver responded questioning if the rates really were fair as “I can get better rates on the high street and without being locked in for three years”.

A Premium Bonds customer chimed in on the thread to say they were having second thoughts about being with NS&I.

They said: “Rates are shocking, also looking to cash in Premium Bonds as they aren’t good value for money these days.”

The British Savings Bonds were announced in the Spring Budget as a new savings vehicle to promote investment in the UK, as well as plans for a UK ISA allowance of £5,000, which is currently under consultation.

Premium Bonds are entered into a monthly prize draw rather than getting an interest rate, with each £1 Bond having an equal chance of winning.

The prize fund rate was reduced from the March draw, dropping from 4.56 percent to 4.4 percent.

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