Savers were dealt a fresh blow this month, as NatWest joined the list of banks and building societies to have cut interest rates in recent times. Among the changes is a reduction to the rates offered on NatWest’s Help to Buy ISA.
It means this account will reduce from two percent to one percent.
This particular account can no longer be opened by new savers, following the deadline to open a Help to Buy ISA falling in November 2019.
That said, it is still possible for savers who opened an account prior to this date to continue putting money in – for the time being, at least.
From November 30 2029, they will no longer be able to put additional contributions into this account.
And, those wishing to claim the 25 percent government bonus – up to £3,000 – it offers, will need to do this by December 1, 2030.
Another change which looms is the reduction in interest paid via the Savings Builder account.
This is to drop from one percent down to 0.75 percent for both NatWest and the Royal Bank of Scotland.
The account was launched in October 2018, originally paying 1.5 percent on balances under £10,000 and 0.2 percent on balances over £10,000, if at least £50 a month was paid into the account.
However, on April 20 this year, the rate for balances under £10,000 was slashed from 1.5 percent to one percent.
Amid the reduction to 0.75 percent, savers who have more than £10,000 in this account will earn just 0.01 percent in interest on the portion over the £10,000 threshold.
There will also be changes ahead for NatWest’s cash ISA customers, with the new rates tiered, depending on the overall balance.
Elsewhere in savings news, a warning was issued to savers yesterday.
It came as the UK officially entered a recession, following the lockdown measures earlier this year in order to try to slow the spread of coronavirus.
Figures released yesterday showed the UK economy shrank 20.4 percent between April and June compared with the first three months of 2020.
The statistics meant the UK had seen two consecutive quarters of economic recline – which defines a recession.
In an article for the Daily Express, Chancellor of the Exchequer Rishi Sunak wrote: “What we’re grappling with is something never seen before, which is why from the start of this crisis I’ve been prepared to put aside ideology and do what was right and fair in order to protect people’s jobs, their incomes and businesses.
“But while it’s clear there are difficult choices to be made ahead, I know that with the resolve and creativity of the British people we will get through this together.”
Following the news of the recession, John Westwood, Group Managing Director at Blacktower Financial Management Group, shared some tips on how members of the public may be able to “recession-proof” their finances.
Among them was a warning about keeping savings protected.
“It’s important to ensure your savings are protected by [the] Financial Services Compensation Scheme (FSCS) – this will cover your savings up to £85,000,” he said.
Published at Thu, 13 Aug 2020 15:31:00 +0000