In response to the Coronavirus pandemic, the Government has asked the National Savings and Investments (NS&I) to raise a record £40 billion this year to help with the fight against the virus.
The Treasury has revised its annual fundraising target for the bank for 2020 from £6 billion up to £40 billion as the Government seeks to recover some of the cost of the Coronavirus support packages it has provided.
The raising of the fundraising limit means that the favourable rates on offer from NS&I should remain available to help lure savers to invest their money in their products.
Originally NS&I had intended to make a savings rates cuts in February, including a reduction to Premium Bond prize fund rate from 1.4 per cent to 1.3 per cent, but these plans have since been dropped due to the pandemic.
NS&I is becoming a popular choice for savers who are struggling to make good returns on high street bank investments.
At the moment most traditional banks only pay around 0.01 per cent on an easy-access savings account, whereas NS&I is currently offering a rate of 1.15 per cent on its easy-access products.
For a person with £10,000 in savings it means that they would get a return of £115 a year with NS&I but just £1 from most mainstream banks.
What’s more, all money saved at NS&I is guaranteed by the Government, whereas ordinary banks only protect up to £85,000.