BEN WILKINSON: A dark cloud has descended over the savings landscape

A dark cloud descended over the savings landscape on Monday morning as NS&I announced a round of cuts that will hit the pockets of 25 million savers.

The cuts are as brutal as they were inevitable. National Savings had, until now, been the last beacon of hope for savers as coronavirus has dragged interest rates farther and farther down.

The 1.4 per cent prize rate currently paid out on Premium Bonds — which will sink to 1 per cent — now looks generous.

Rates slashed: National Savings's 1.4 per cent prize rate currently paid out on Premium Bonds will sink to 1 per cent

Rates slashed: National Savings's 1.4 per cent prize rate currently paid out on Premium Bonds will sink to 1 per cent

Rates slashed: National Savings’s 1.4 per cent prize rate currently paid out on Premium Bonds will sink to 1 per cent

It’s easy to forget that just 12 years ago the bank was paying out at 3.40 per cent.

But perhaps now we have hit rock bottom. The big banks are paying a pittance at 0.01 per cent and you will need a £50,000 deposit just to keep up with inflation.

Can things really get any worse for savers?

We are now well and truly in a savings dark age and there is no light at the end of the tunnel. The big banks don’t want to pay you for holding your money, and the Chancellor clearly just wants us to be spending to get the economy pumping again.

I recently opened a Premium Bonds account for my newborn daughter and the cuts now mean the chances of her winning anything before she starts school aren’t great.

But still, I’m happier for that money to sit with NS&I (and retain the shot at the £1 million jackpot) than with a big bank paying an insulting 0.01 per cent.

There was also more sad news for savers in the decision from NS&I to stop sending prize winners a cheque in the post. 

Around five million of us choose to get any prize warrant through the letterbox, and the decision to take that simple joy away from us just saps even more of the pleasure out of saving.

It has been a terrible week for savers, but we still should not tolerate paltry rates. If your bank isn’t offering a fair rate, move your money somewhere else.

Pensions battle

There is no doubt some women have suffered as a result of the increase in state pension age.

But now the dust is settling following the resounding defeat of the Backto60 legal challenge, and it seems that the group’s ‘all-or-nothing’ demand has caused problems.

Former supporters who questioned that tactic or asked about how their money had been spent are finding themselves blocked online.

Backto60 campaign director Joanne Welch hung up the phone when I asked her about some of the criticisms the group is now facing. Thousands of women, who staked their hopes and cash they can ill afford on the legal challenge, deserve answers.

Women are still too often left disadvantaged by the pension system and end up poorer as a result. But the rise in the state pension age was not an act of discrimination, regardless of how unjust it felt.

As pensions expert Baroness Altmann says, there are continuing injustices, such as the pension gender pay gap, that can still be fixed.

Loyalty must pay

It’s great news for readers that insurance firms are to be forced to stop insidious price hikes for their loyal customers.

Money Mail has campaigned hard in recent years to put a stop to the so-called loyalty penalty in the home and car insurance markets. It makes no sense that companies can sneak up prices year on year in the hope that no one notices, while saving the best deals as bait for new customers.

Even this year, when many of us have been stuck at home, we have heard stories of insurance bills rising without explanation.

It has taken a while for the regulator to act — and now other companies should sit up and listen. Broadband and mobile phone firms, mortgage and savings providers all need to stop relying on customer inertia to boost their profits.

Consumers should not be made to work hard for a fair deal.

Victoria Bischoff is away

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