Rates on a range of National Savings & Investments products will fall from 1 May.

National Savings and Investments (NS&I) has announced that it will be cutting interest on four of its variable rate products from 1 May. These follow the Bank of England’s base rate cut to 0.25% which took place in August 2016.

Income Bonds and Direct ISA

The changes will reduce the interest paid on Income Bonds and the Direct ISA to just 0.75%, well below the rate of RPI inflation which in January was 2.6%. The cuts will again remove NS&I from the top rungs of the league tables where, unusually, they have been for some months.

Premium Bonds

Premium Bonds will suffer a smaller cut. The annual prize fund rate dropping from 1.25% to 1.15%. To deal with this – which equates to an 8% drop in total prize money payments – the distribution of prizes will be altered once more. The share of the prize fund going to large (£5,000 and over) payouts will be unchanged at 5% of the total jackpot. NS&I estimates that the number of large prizes will drop from 111 in February 2017 to 89 in May 2017. The total number of prizes in both months will be over 2,200,000 and the odds on winning, 1 in 30,000.

National Savings products, being backed by the UK government, are some of the safest around, so if your priority is to preserve your capital they should form part of your research.

If you need an income or want to grow your savings they are other options available.

The general rule of investment is still valid: If you want a higher return you will probably have to take more risk with your money.

As always, getting the right balance to suit your personal attitude to financial risk is important.

We can help you understand the financial risks you should consider, and help you find suitable  investments and products to match.

If you would like a review of your investment risk call us on 020 8559 2111.

[highlight]The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investing in shares should be regarded as a long-term investment and should fit in with your overall attitude to risk and financial circumstances.[/highlight]