More than 400,000 savers suffered a sharp fall in the level of interest they receive on their National Savings & Investments funds from yesterday, with experts warning that the rest of the industry was sure to follow suit.
NS&I, which is controlled by the Treasury, cut the rate on its Direct Isa from 1.5 per cent to 1.25 per cent, the lowest since the product was launched in 2008.
That represents a £50 million hit to the interest that would be paid for the next five years on the £3.8 billion invested in the NS&I Isa. It is equal to a cut of £660 in interest payments over five years on savings of £50,000.
Critics expressed surprise when the move was first mooted two months