Media centre /

Press release

NATIONAL SAVINGS AND INVESTMENTS RATE CHANGE

20 December 2007

National Savings and Investments (NS&I) is decreasing the interest rates on its variable savings offers by up to 0.25% per annum.

This decrease follows the movement in the Bank of England base rate on 06 December 2007, from 5.75% to 5.50%, which has a bearing on NS&I’s variable rate products.  The revised interest rates will come into effect on 20 December 2007 for all variable rate products, with the exception of the Direct ISA which was decreased on 6 December 2007, Premium Bonds which will take effect from 1 January 2008 and Income Bonds from 7 January 2008.

Premium Bonds

The Premium Bond prize fund rate will decrease from 4.00% p.a. to 3.80% p.a. free of UK Income Tax and Capital Gains Tax.  NS&I will continue to give away over one million tax-free Premium Bond prizes each month, including two £1 million jackpot prizes.

The odds of winning a prize with each £1 Premium Bond will remain at 21,000 to 1. The prize band split between lower, medium and higher value prizes will change in order to retain a consistent number of lower value prizes.

The effect of changes in the Premium Bond prize fund rate

	DECEMBER 2007 4.00% prize fund rate	JANUARY 2008 (estimate) 3.80% prize fund rate
Total value of prizes	£119,736,250 million	£112,385,584 million
Total number of Prizes	1,710,517 million	1,690,008 million
Prize fund rate	4.00%	3.80%
Odds of winning a prize	21,000 to 1	21,000 to 1
Prize band split: Higher value prizes(£5,000 +) Medium value (£500 +) Lower value (£50 +)	10%   10% 80%	8%   6% 86%

ENDS

Notes to editors

Tax-free1 variable rates	Rate p.a. (change in brackets)	AER3
Cash mini ISA (new rate effective from 20 December 2007)	5.10% (-0.25%)	5.10%
Direct ISA (new rate effective from 6 December 2007)	6.05% (-0.25%)	6.05%
Premium Bond prize fund (new rate effective from 1 January 2008)	3.80% (-0.20%)	3.80%

 

 

 

 

 

New variable rates (gross rates2)	Rate p.a. (change in brackets)	AER3
Income Bonds   (new rates effective from 7 January 2008) £25,000+ Under £25,000	5.20% (-0.25%) 4.95% (-0.25%)	5.33% 5.06%
Investment Account  (new rates effective from 20 December 2007) £50,000+ £25,000+ £10,000+ £5,000+ £500+ Under £500	4.60% (-0.25%) 4.25% (-0.25%) 4.05% (-0.25%) 3.85% (-0.25%) 3.75% (-0.25%) 3.70% (-0.25%)	4.60% 4.25% 4.05% 3.85% 3.75% 3.70%
Easy Access Savings Account   (new rates effective from 20 December 2007) £50,000+ £25,000+ £10,000+ £5,000+ £1000+ Under £1000	4.90% (-0.25%) 4.65% (-0.25%) 4.40% (-0.25%) 4.15% (-0.25%) 3.85% (-0.25%) 2.35% (-0.25%)	4.90% 4.65% 4.40% 4.15% 3.85% 2.35%

1. Tax-free means that interest and prizes are exempt of UK income Tax and Capital Gains Tax

2. Gross means the taxable rate of interest without the deduction of UK Income Tax

3. 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.

4. When interest rates are set on tax-free products, NS&I takes into account the amount of tax the Exchequer would have received if the product had been taxable.

Due to time restraints imposed by the Christmas break, this announcement on rate changes occurs on a Wednesday, embargoed for Thursday 20 December.  Future announcements will revert to a Tuesday, embargoed for a Wednesday. We apologise for any inconvenience this may cause. 

Media team
NS&I has a number of spokespeople available for interviews and our experienced radio team is available via our ISDN line: 020 7602 4522.

The numbers below are for media use only. Customers wishing to contact NS&I can find details here.

Gill Stephens		020 7348 9449
		gill.stephens@nsandi.com
Iman Asante		020 7348 9301
		iman.asante@nsandi.com
Angela Mason		020 7348 9433
		angela.mason@nsandi.com
ISDN for interviews		020 7602 4522
Out of hours		All numbers above diverted to staffed mobile phones

 

Back to top

• Back to media releases
• Contact the NS&I media team