Long suffering savers have received more bad news as National Savings & Investments has announced cuts to its rates effective from 24 November 2020.

This will apply to its variable rate products and some fixed-term products, while the Premium Bonds prize fund rate will be reduced from the December 2020 draw.

These reductions will see NS&I align its savings products against the rates offered by banks and building societies.

In July this year, NS&I’s net financing target for 2020-21 was revised from £6bn to £35bn to reflect the government’s funding requirements due to the Covid-19 pandemic.

In Q1 2020-21 from April to June, NS&I saw inflows of £19.9bn and delivered £14.5bn of net financing. Demand for NS&I products has remained at similarly high levels from July to September.

Explaining the decision to cut rates, NS&I chief executive Ian Ackerley said: “Reducing interest rates is always a difficult decision. In April we cancelled interest rate reductions announced in February and scheduled for 1 May.

“Given successive reductions in the Bank of England base rate in March, and subsequent reductions in interest rates by other providers, several of our products have become ‘best buy’ and we have experienced extremely high demand as a consequence.

“It is important that we strike a balance between the interests of savers, taxpayers and the broader financial services sector, and it is time for NS&I to return to a more normal competitive position for our products.”