NS&I to cut premium bond rate and other accounts

EdGasketTheSecond

Perhaps instead of quoting APR, savings institutions should instead quote how many years your savings will last before they are reduced to 1% of their value by projected inflation based on the minute interest you will get.

ffacoffipawb

EdGasketTheSecond said:

Perhaps instead of quoting APR, savings institutions should instead quote how many years your savings will last before they are reduced to 1% of their value by projected inflation based on the minute interest you will get.

155 years at 3% inflation and 0.01% interest.

bowlhead99

EdGasketTheSecond said:

Perhaps instead of quoting APR, savings institutions should instead quote how many years your savings will last before they are reduced to 1% of their value by projected inflation based on the minute interest you will get.

It would be un-regulateable because 'projected inflation' is a 'stick a finger in the air and see where the wind is blowing and where it might blow next' job. The government and BoE don't know what inflation is going to be, so a savings bank isn't going to know either. And if they wanted to entice savers they would simply 'project' a lower rate of inflation than their rivals, in a race to the bottom.

So, perhaps they should not adopt that approach. If they project long-term inflation to be 2% and they choose to pay 0% interest on the account, it is not particularly useful to tell the customer "we project it will take 225 years for your savings to be reduced to 1% of their value based on the interest you will get". It would be more useful to tell the customer what AER they are currently paying so that the customer can shop around for other deals and make their own assessment of what effect inflation will have on a large pile of cash or shares (or gold or silver to use your pet topics) etc etc

Deru

I'll stick with PB and continue to invest there.  1% is not guaranteed as you may win nothing of course. I've only got a fifth of the pot full and won 3x £25 this year so not been too bad for me anyway.  It's cheaper than playing the lottery for a chance at some prizes.

polymaff

Deru said:

I'll stick with PB and continue to invest there.  1% is not guaranteed as you may win nothing of course. I've only got a fifth of the pot full and won 3x £25 this year so not been too bad for me anyway.  It's cheaper than playing the lottery for a chance at some prizes.

0.9% p.a. is pretty much guaranteed for big holders.  This may look attractive - particularly for savings income tax payers - now, and even more so before long.  To do an Income-bond-job on PBs would generate a lot of bad publicity.

Biggus_Dickus

polymaff said:

Deru said:

I'll stick with PB and continue to invest there.  1% is not guaranteed as you may win nothing of course. I've only got a fifth of the pot full and won 3x £25 this year so not been too bad for me anyway.  It's cheaper than playing the lottery for a chance at some prizes.

0.9% p.a. is pretty much guaranteed for big holders.  This may look attractive - particularly for savings income tax payers - now, and even more so before long.  To do an Income-bond-job on PBs would generate a lot of bad publicity.

...bad publicity doesn't appear to be an issue atm. 

RG2015

polymaff said:

Deru said:

I'll stick with PB and continue to invest there.  1% is not guaranteed as you may win nothing of course. I've only got a fifth of the pot full and won 3x £25 this year so not been too bad for me anyway.  It's cheaper than playing the lottery for a chance at some prizes.

0.9% p.a. is pretty much guaranteed for big holders.  This may look attractive - particularly for savings income tax payers - now, and even more so before long.  To do an Income-bond-job on PBs would generate a lot of bad publicity.

Does £10,000 qualify as a big holder?

@Deru above, has £10k and has won £75 in nine draws, hence 1% pa average.

Speedbird676

I've only just received the email 

Biggus_Dickus

Speedbird676 said:

I've only just received the email 

I got my email this morning at 10.32am;...it’s the first official customer notification I’ve had since this became public a full 3 working days ago.

Nice one NS&I... “When the rate is going down, we'll also contact you personally in advance to let you know.”

eskbanker

RG2015 said:

polymaff said:

Deru said:

I'll stick with PB and continue to invest there.  1% is not guaranteed as you may win nothing of course. I've only got a fifth of the pot full and won 3x £25 this year so not been too bad for me anyway.  It's cheaper than playing the lottery for a chance at some prizes.

0.9% p.a. is pretty much guaranteed for big holders.  This may look attractive - particularly for savings income tax payers - now, and even more so before long.  To do an Income-bond-job on PBs would generate a lot of bad publicity.

Does £10,000 qualify as a big holder?

@Deru above, has £10k and has won £75 in nine draws, hence 1% pa average.

You're at cross purposes!

The £75 from £10K over nine draws is looking retrospectively, and that 1% annualised return is below the current median average.

polymaff's 0.9% refers to the future 'average luck' expectations after the November changes, despite the notional 1% published figure that's distorted by large prizes....