NS&I accused of leaving savers high and dry

This week’s midweek money sections focused on the withdrawal of National Savings & Investments’ (NS&I) index-linked and fixed-rate tax-free saving certificates and the worrying repercussions that this will have for savers.  Holly Thomas at the Express explained how the removal of NS&I’s index-linked savings certificates has set back millions of account holders who are already reeling from the record low saving rates and rising prices. These savings certificates came with a Government-backed promise of 100% security – crucial at the moment – alas, such a promise is no more.

The MoneyMail also picked up on this theme covering NS&I’s 0.25% cut in interest for 254,000 of its Income Bond holders. MoneyMail says this means that a pensioner with £25,000 of Income Bonds will lose £5.20 a month income, a far from comforting thought given that our pension pots are already being eaten into. In The Mirror, Tricia Phillips commented how the £4 a day that we spend on coffee could better be invested in a Stakeholder Pension. The notion that a 40-year-old who invests this amount could end up with a pot worth £105,000 when they are 65 is certainly food for thought.

Rosie Murray-West at The Daily Telegraph warned savers that in order to beat the Consumer Price Index, a basic-rate taxpayer will need to find an interest rate of 4% or above– a feat which has been made all the more difficult following NS&I’s unpopular move. She suggested using an ISA in order to protect your money from losing value, but as the Express commented, most ISAs are paying interest at considerably less than the rate of inflation so savers are losing money.  Oh, and if you were thinking about popping your money into an online bank account, Lauren Thompson’s report in MoneyMail about the poor security on bank websites is well worth a look.  With online banking customers vulnerable to phishing attacks and computer viruses, saving in the piggy bank is looking more and more appealing…

Midweek stories round up:

Charity                  0%

Credit cards        14%

Fraud/scams      5%

IFAs                       0%

Insurance            0%

Investment        10%

Mortgages          13%

Pensions              17%

Regulation          13%

Savings                 17%

Tax                         6%

Utilities                 5%