NS&I has also slashed its Direct Saver rate from 1.5 per cent to 1.1 per cent and Income Bond from 1.75 per cent to 1.25 per cent.
With Consumer Prices Index inflation at 2.4 per cent, savers are increasingly faced with below inflation returns on their cash, or taking risk in the markets. There's been a lot of wishful thinking from savers that NS&I will bring back its index-linked savings certificates, that provided tax-free returns linked to Retail Prices Index inflation. But there are no inflation protected products available via other banks, either.