In November I wrote a blog castigating Rishi Sunak, the Chancellor, for his introduction of “rip off ” rates for safe savers – many of them pensioners – who have National Savings accounts.
As I said at the time; ” Effectively Rishi Sunak, the Chancellor, is making sure that millions of savers and those who have a flutter on the Premium Bonds subsidise the government’s multi billion pay outs by losing money every year they invest.”
Now thanks to the House of Commons Treasury Select Committee – which took up the issue of the low rates -and also poor customer service, record levels of complaints and long waits hanging on their phone lines – his whole dastardly plot has been exposed.
Mel Stride, Conservative chair of the committee, decided to write to Ian Ackerley, Chief Executive of National Savings and Investments, demanding an explanation.
Today the committee has published his reply with a tough comment from Mr Stride about what happened.
” damage may have been done to NS&I’s reputation”
He said: “An exodus of savers from NS&I when it cut interest rates in November was foreseeable and so it is disappointing that the average time to answer a customer’s call was 19 minutes that month.
“I would like to thank Mr Ackerley for his frank response, but the damage that may have been done to NS&I’s reputation over the last few months is worrying.
“NS&I has a big role to play in helping the Government fund the costs of the coronavirus recovery scheme and it will need to work hard to win back customers.”
But what is really interesting is Mr Ackerley’s explanation of how these changes in interest rates came about.
Ministers took decision not to cut interest rates
After Rishi Sunak became chancellor and pandemic took hold he decided to deliberately to attract savers to get the government out of a spending hole.
As National Savings says:
“In March 2020, in response to the Covid-19 pandemic, HM Treasury asked NS&I to provide proposals for how NS&I could quickly provide additional funding beyond the £6 billion target to support the Government’s increased borrowing requirement. …A proposal was made to Ministers to reverse the decision to implement interest rate reductions to NS&I’s variable rate products that were announced in February (before the Covid-19 pandemic had taken hold) and which were due to come into effect on 1 May 2020. “
“Ministers made the decision to proceed with this plan and on 1 May, only interest rate reductions on NS&I’s fixed term products came into effect. Variable rate product interest rates were left unchanged.”
By September it had been too successful. ” There was unexpectedly more cash in the savings market and much of this money came to NS&I – £38.3 billion in net inflows from March to September 2020 – this was a greater level of Net Financing than in the previous three years combined.”
Plan to drive savers away
So a decision was then made deliberately to drive savers away by introducing rock bottom rates because he no longer needed it.
National Savings said: “Based on previous patterns, we expected that a proportion of customers would withdraw their money. However, as many were newer customers who had come to NS&I when we were offering ‘best buy’ rates, the scale of the outflows and the timing of customers cashing in their holdings happened earlier than expected.
“A combination of factors has impacted our customer service operations which has been stressful for some customers and staff. We did not intend for this to happen but we do not believe that the situation could have been predicted.”
What happened was a rise in complaints, people waiting nearly 20 minutes on the phone to contact them and general disatisfaction with the service.
What is not said though is that the government will not want people to continue saving when the pandemic is over. They will need to spend to revive the economy. What better way to empty savings accounts than to make them so unattractive that people lose money keeping cash there.
So the real story is that this government is deliberately manipulating punters to suit its own interests -putting money away when they can’t spend it during the pandemic – and forcing them to spend it when the pandemic is over. They must take the average saver to be a fool.
Well, if you had the power and the responsibility to govern….this is what you should be doing? Sounds like they’re actually getting it right for once, to my mind….. But I’m curious on these Premium Bonds things…I have some from since when I was a child. I can’t cash them in as I don’t have any ID…..and nobody in the so called family will do it for me 😦 I have no money really….other than charity. Bit I thought these things were a bit like lottery numbers….you can ‘win’ on them sometimes, not just cash them in for the face value at any time? But nobody seems to know how you check the numbers on them? That sounds much of a scam to me that somebody should be writing about imho…..
It’s amazing. This Governments constant and inventive ability to ‘stiff’ the people of this country knows no bounds.
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That man is a rip off merchant even down to expecting making iur cars even more taxed .corrupt thieving and taking old people that need their cars to do shopping ect .but he wont care a dot and when old cant get to shops and die on his head be every one
Thief nothing else like its done with womens pension .he needs to live fir a month or to on 740 for a month .after working all your life
Our parliment are liars thieves and self serving arrogant over paid .
They are thieves and the worst is the chancelor i dont trust that snake one bit
Risi is totaly dis honest he wants poorer people to be crawling on their knees .The things he is lowering are the poorist in uk .hes hitting our cars (used by people that desperatly to get food ect .my father left me his car when he died a car i could never have afford to buy .Now hes hitting poorer people that work hard pay their way ect .But this man is hitting poorist yet again and any low paid people .Ect cars food homes even food he is an evil man i think that resents poorer people .But he needs to think a car is probably the only thing that takes them out of their house for a while helps them their food ect .He does not know the harm that will do them .that even if its an old little car .They could have a time out to take them get to shop ,go to a park a zoo just a day out .and for some their job .But people like him is hitting the only lifeline a lot of people its the only thing they have .I am one of these !!! But to people of him dont care posh cars loads of money ect he is totaly cruel .He should be in 99 out of these people that work hard get robbed by more tax .LUCKY TO HAVE A DECANT MEAL TO DO SOMETHING FOR 1 DAY OUT OF IUR TAXED TO DEATH (AND THESE PEOPLE LIKE HIM ARE DOING IT MORE .)WHAT ARE WE YOUR CASH COW WITH NO LIVES !!!! WELL USE BECAUSE OF YOU THAT SUT ON THEIR BACKSIDES LAUGHING AT THE WORKING OR PEOPLE THAT WORK ALL THERE LIVES FOR YOU TO LOOK AT US LIKE MUCK .IT WOULD DO PEOPLE LIKE TO BE THE WORKING PEOPLE THAT PLAY YOUR BIG HEADED ARROGANT NEVER WORKED A PROPER DAY IN HIS LIFE .WE ARE THE ONES THAT CARE ABOUT OUR COUNTRY NOT YOU !