{"id":7454,"date":"2020-10-29T10:22:09","date_gmt":"2020-10-29T10:22:09","guid":{"rendered":"https:\/\/sbwm.uk\/?p=7454"},"modified":"2020-10-29T16:47:07","modified_gmt":"2020-10-29T16:47:07","slug":"national-savings-wields-the-axe","status":"publish","type":"post","link":"https:\/\/sbwm.uk\/v3\/newsletter\/national-savings-wields-the-axe\/","title":{"rendered":"National Savings wields the axe"},"content":{"rendered":"<!--themify_builder_content-->\n<div id=\"themify_builder_content-7454\" data-postid=\"7454\" class=\"themify_builder_content themify_builder_content-7454 themify_builder tf_clear\">\n    <\/div>\n<!--\/themify_builder_content-->\n\n<p><b>National Savings rate to drop sharply from 24 November.<\/b><\/p>\n<p>At times, National Savings &amp; Investments (NS&amp;I) looks like a relic. Its role in raising money for the government has seemed an increasing anachronism for three main reasons:<\/p>\n<ul>\n<li>The amount NS&amp;I raises each year is but a small part of the government\u2019s total borrowing. For 2020\/21, NS&amp;I\u2019s fundraising target is \u00a335 billon (\u00b1 \u00a35 billion), but on current estimates, the government will need to borrow more than ten times as much.<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li>Rather than selling NS&amp;I products, the government can raise billions by selling government bonds (gilts) with much less administration at significantly lower interest rates. At the time of writing, gilt yields were negative for terms of up to six years.<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<li>On the rare occasions when NS&amp;I rates are competitive, it can distort the savings market, prompting criticism from the building societies and banks with which it competes for retail deposits.<span class=\"Apple-converted-space\">\u00a0<\/span><\/li>\n<\/ul>\n<p>In mid-February, NS&amp;I announced that it would be cutting interest rates across a range of plans from 1 May. Two months later, NS&amp;I changed its mind and announced in a press release under the headline \u201cNS&amp;I supports savers in this unprecedented time\u201d, that it was dropping the planned changes to variable rate products. All then went quiet, leaving NS&amp;I with a range of league-topping interest rates. Between April and June, nearly \u00a320 billion flowed into its coffers.<\/p>\n<p>On 21 September, NS&amp;I had a change of heart, deciding that reductions were necessary to \u201censure NS&amp;I\u2019s interest rates are aligned appropriately against those of competitors\u201d. The cuts, which generally take effect from 24 November, were dramatic, as the table shows.<\/p>\n<p><a href=\"https:\/\/sbwm.uk\/v3\/wp-content\/uploads\/2020\/10\/National-Savings-chart.jpg\"><img decoding=\"async\" class=\"alignnone  wp-image-7455 lazyload\" data-src=\"https:\/\/sbwm.uk\/v3\/wp-content\/uploads\/2020\/10\/National-Savings-chart-1024x576.jpg\" alt=\"National Savings chart\" width=\"513\" height=\"289\" data-srcset=\"https:\/\/sbwm.uk\/v3\/wp-content\/uploads\/2020\/10\/National-Savings-chart-1024x576.jpg 1024w, https:\/\/sbwm.uk\/v3\/wp-content\/uploads\/2020\/10\/National-Savings-chart-300x169.jpg 300w, https:\/\/sbwm.uk\/v3\/wp-content\/uploads\/2020\/10\/National-Savings-chart-768x432.jpg 768w, https:\/\/sbwm.uk\/v3\/wp-content\/uploads\/2020\/10\/National-Savings-chart.jpg 1200w\" data-sizes=\"(max-width: 513px) 100vw, 513px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 513px; --smush-placeholder-aspect-ratio: 513\/289;\" \/><\/a><\/p>\n<p>Such microscopic rates will take NS&amp;I to the bottom of the league tables. If your income will be hurt by the NS&amp;I cuts, make sure you consider all of the options before moving your money. With the best available rate just 1.6% \u2013 for a five-year bond \u2013 at the time of writing, now could be the time to talk to us about your income options beyond deposit investments.\u00a0<\/p>\n<p><b><i>The value of your investment and income from it can go down as well as up and you may not get back the full amount you invested.<span class=\"Apple-converted-space\">\u00a0<\/span><\/i><\/b><\/p>\n<p><b><i>Past performance is not a reliable indicator of future performance.<span class=\"Apple-converted-space\">\u00a0<\/span><\/i><\/b><\/p>\n<p><b><i>Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.<\/i><\/b><\/p>","protected":false},"excerpt":{"rendered":"<p>National Savings rate to drop sharply from 24 November. At times, National Savings &amp; Investments (NS&amp;I) looks like a relic. Its role in raising money for the government has seemed an increasing anachronism for three main reasons: The amount NS&amp;I raises each year is but a small part of the government\u2019s total borrowing. For 2020\/21, [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":7456,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"wds_primary_category":33,"footnotes":""},"categories":[33],"tags":[],"class_list":["post-7454","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-newsletter","has-post-title","has-post-date","has-post-category","has-post-tag","has-post-comment","has-post-author",""],"builder_content":"","_links":{"self":[{"href":"https:\/\/sbwm.uk\/v3\/wp-json\/wp\/v2\/posts\/7454","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sbwm.uk\/v3\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sbwm.uk\/v3\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sbwm.uk\/v3\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/sbwm.uk\/v3\/wp-json\/wp\/v2\/comments?post=7454"}],"version-history":[{"count":0,"href":"https:\/\/sbwm.uk\/v3\/wp-json\/wp\/v2\/posts\/7454\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sbwm.uk\/v3\/wp-json\/wp\/v2\/media\/7456"}],"wp:attachment":[{"href":"https:\/\/sbwm.uk\/v3\/wp-json\/wp\/v2\/media?parent=7454"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sbwm.uk\/v3\/wp-json\/wp\/v2\/categories?post=7454"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sbwm.uk\/v3\/wp-json\/wp\/v2\/tags?post=7454"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}