 |
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
 |
Media centre /
Press releaseNATIONAL SAVINGS AND INVESTMENTS RATE CHANGES 25 November 2004Significant falls in gilt yields since the summer have resulted in National Savings and Investments (NS&I) having to reduce the interest paid on fixed rate products. Since August, NS&I has maintained consistent interest rates, despite a fall in gilt yields. However, as the trend has continued rate reductions have become inevitable. NS&I’s variable rate products such as Premium Bonds, the Investment Account and the Easy Access Savings Account remain unchanged. Many other leading savings providers have also reduced some of their fixed savings rates over the past three months, including Halifax, Abbey, Lloyds TSB, Woolwich, Nat West, Barclays, Royal Bank of Scotland and Birmingham Midshires. In following its interest rate policy of offering fair and consistent rates of return on its fixed rate products, NS&I’s prime influence is the yield on gilts in the short to medium term money markets. Yields on gilts have continued to fall since June 2004 putting pressure on the rates that NS&I offers.
*Time to maturity NS&I’s products continue to offer good value, for example, five-year Index-linked Savings Certificates offer index-linking to the Retail Price Index (RPI) +1.05% AER. The equivalent grossed up rates are 5.44% and 7.25% for basic and higher rate taxpayers, assuming the Retail Price Index grows at its current rate of 3.3% for each of the next five years and that current rates of tax remain unchanged. NS&I’s interest rates: key facts
John Prout, NS&I’s sales director, said: “Since the summer, the downward trend on gilts has continued and while we have tried to keep our fixed rates as they were, further falls in November have demanded that we make these changes. This trend has meant that many of our competitors have also had to reduce rates over the past two to three months and the rates offered in the summer are unlikely to return in the immediate future. “However, we always price our offers fairly and consistently in line with movements in the market and, if gilt yields rise again, we would aim to increase our fixed rates.”
ENDS NOTES TO EDITORS
1. Tax-free means the return is exempt from UK Income Tax at all rates of taxation. 2. AER stands for Annual Equivalent Rate and enables the comparison of interest rates from different financial institutions and across different products on a like-for-like basis. It shows what the notional annual rate would be if interest was compounded each time it was credited or paid out. Where interest is credited once a year the rate quoted and the AER will be the same. 3. At current tax rates. 4. These figures assume the Retail Price Index rises by its current figure of 3.3% for each of the next five years and that current rates of tax remain unchanged. 5. Gross means the taxable rate of interest without the deduction of UK Income Tax.
For further information, or to arrange an interview, contact the media relations team. Mark Brooks 020 7348 9301 mark.brooks@nsandi.com Jonathan Akerman 020 7348 9433 jonathan.akerman@nsandi.com Wendy Franklin 020 7348 9449 wendy.franklin@nsandi.com Elen Thomas 020 7348 9654 elen.thomas@nsandi.com Out of hours All above numbers go to mobile phones staffed 24 hours Web www.nsandi.com
Media team The numbers below are for media use only. Customers wishing to contact NS&I can find details here.
|
|
Search |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
 |
|
|
||||||||||||||||||||||||||||||
