Autumn Statement: New bond of little comfort for savers

Andrew Hagger of Moneycomms, comments on the Chancellor's Autumn Statement announcement of a new NS&I savings bond paying 2.2%.

Autumn Statement: New bond of little comfort for savers

On the face of it this may seem like some much needed good news for beleaguered UK savers. However with the maximum balance permitted set at a paltry £3,000, savers would earn just £66 per annum or £198 over 3 years.

At present the best buy UK FSCS protected 3 year fixed rate bond from Tesco Bank is paying 1.62% and will generate £48.60 per annum in interest or £145.80 over 3 years. The interest benefit of the new NS&I deal against this current best buy is just £17.40 per year or £52.20 over the 3 year term.

It’s hardly going to get savers rejoicing from the rooftops particularly as they will have to lock their cash away for three years.

Also the Insurance Premium Tax increase of another 2% will further eat into any minor financial gains made possible by the new bond.

It’s too little too late for UK savers who’ve suffered for too long at the expense of a government policy hellbent on protecting mortgage borrowers at all costs. – it’s little more than a token gesture from  Hammond trying to paper over the cracks.

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