Income tax on NS&I Guaranteed Growth Bonds

MumOf2

I received an email from NS&I this morning advising:
"For our 2, 3 and 5-year Guaranteed Growth Bonds that are purchased or renewed on or after 1 May 2019, all interest will be treated as being received in the year in which the Bond matures. This is different to how interest was treated for previous issues, where interest was treated as being received annually."

I checked the Key Terms for these bonds dated 1 May 2019 and still valid at today's date which clearly states that interest is earned and credited annually on the purchase or renewal date.

On phoning NS&I to ask which tax treatment was correct, the customer service person didn't know what this was all about and had to speak to a supervisor who advised that this was a requirement dictated by HMRC and has nothing to do with NS&I.  But you still can't cash them in early so are stuck.

So this means that, on a £10,000 bond, instead of declaring approx. £195.00 a year on each tax return for three years, you have to declare approx. £600 in the third year.  Which is £100 more than the savings allowance for a higher rate tax payer.  I did suggest this would potentially push people into higher tax bands but the response was that not many people would be earning so much interest that it would make a difference...  There will be plenty of people on here who earn more than £500 a year in interest.

Am I wrong in thinking this is really bad:
1.  It's a retrospective material change in the way in which interest on the bond is taxed.
2.  The Key Terms haven't been changed on the NS&I website.
3.  The customer service staff haven't been prepped with sufficient knowledge to answer straightforward questions.
4.  NS&I include their telephone number for queries but then just excuse it by blaming HMRC.
5.  If this material change means the bonds aren't suitable for you, NS&I still won't let you cash them in early as per the T&Cs 1 May 2019 onwards.

Any thoughts?
MumOf2 

MumOf2

Sorry, have just found out this is old news!  But first I've heard of it...  oh dear.

So I'll take it out of my tax return papers for this year...

MumOf2