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NS&I makes changes to ISAs and Premium Bonds

The government-backed savings organisation is revamping its product range.


by Michelle McGagh on Jan 24, 2013 at 09:41

NS&I makes changes to ISAs and Premium Bonds

NS&I has announced changes to its savings range, including lowering the minimum amount that can be saved into its Direct ISA.

As part of its modernisation programme, government-backed NS&I has said it will be transferring customers holding its T Cash ISA, formerly known as the Tessa-Only ISA, and its Cash ISA – which have been closed since 1999 and 2009 respectively – into its Direct ISA.

The T Cash ISA and the Cash ISA both currently pay 0.5% compared to 2.25% for the Direct ISA. In November the rate offered on the Direct ISA was cut from 2.5% to 2.25%.

Transfers will be made on 25 May 2013.

It has also lowered the minimum investment amount for the Direct ISA from £100 to £1 to make it more accessible.

There are also changes to Premium Bond investments. From 1 April 2013 savers will only be able to invest in Premium Bonds by cheque and debit card at the counter, or directly from NS&I by post, phone, online or standing order.

NS&I said the number of customers investing by post, phone and online directly with the organisation has increased and subsequently it has withdrawn all products, except Premium Bonds, from the Post Office.

Jane Platt, chief executive of NS&I, said: ‘Since 2007 we have been working to simplify and modernise our range of savings products and to encourage our customers to invest with us directly.

‘From 25 May 2013, customers holding our Cash ISA will benefit from the much higher interest rate paid on our Direct ISA. There will be some changes for our customers who use the Post Office – however, staff in our UK based contact centres will be on hand to help with the transition.’

NS&I said the changes will not only benefit savers but reduce the organisation’s budget by 10% by 2015, to meet cuts demanded in the 2010 Spending Review.

11 comments so far. Why not have your say?

William Cochrane

Jan 24, 2013 at 18:01

I'd like clarification that NS&I will indeed offer savers, from 1 April 2013, the opportunity "to invest in Premium Bonds ....................directly from NS&I by post, phone, online or standing order."

The last time that I contacted NS&I by phone, to increase my holdings of Premium Bonds using my Holder Number and Debit card, I was told that this was the last time they would allow me telephone dealing unless I registered on-line.

I said that I was loath to do so as it meant an other user-name & password. However, no flexibility: I was told that if I used the phone service again, the system would recognise me as a non-conformer and I would be refused service.

Subsequent to that I have used my local Post Office. It will be great if they have changed their mind and will allow telephone dealing without on-line registartion.

It would be good if Michelle McGagh would cet clarification from NS&I.

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Linda Green

Jan 24, 2013 at 19:41

Thousands of low income people don't have the internet, and many don't even have ordinary bank accounts. Reducing what can be don at the post office is a reduction in service for many people. In addition, there will be no leaflets on display, they will, for some reason, only be kept under the counter, so you will have to ask for them. sounds to me to be a way of running the service down. If you don't see the leaflets on display you won't even know that the service exists.

In addition, they are forcing the cashing in of childrens bonds, where previously they could be kept until the age of 21. - Now you have to cash them in on the first 5year anniversary reached after 16. Again, they are just trying to run the service down altogether and make it innaccessible for many people.

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Tony Peterson

Jan 24, 2013 at 20:23

Why anyone would want to trust this organ of a corrupt state to help them lose the real value of their cash utterly bemuses me. Avoid.

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Rovert Ragde

Jan 24, 2013 at 20:37

I invested £15k in pb for my daughter thinking she would get them when she was 21, she received a cheque for this months winnings through the post this month because she had reached 16 they have been transferred into her name and the winnings are being reinvested but sent to her by cheque, she now has access to all the money at 16! She had no idea the money was there, now she does thanks to ns& For sending her a cheque, she checked the holdings on the Internet and now wants to spend it. Investors beware.

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Martin Rigler

Jan 24, 2013 at 21:19

It would be nice to be able to invest in Premium Bonds! Am I the only one caught by changes to the NS&I web access? Have been waiting a week for post to deliver my new number so I can buy a second tranche of Bonds. Same thing happened when I tried to buy 2 tranches of Index Linked bonds. Coincidence? or deliberate delay? ... and I agree that small post offices are being undermined by stealth! Implementing Tory policy by the back door.

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Colin A

Jan 25, 2013 at 04:50

I have been trying a valuation for my Saving Certificates since early December. In spite of several requests, NS & I have been only been able to send a valuation of certificates which have been migrated to their new system. No mention of course that this that this is an incomplete valuation.How useless is that?

Does anyone know who regulates NS & I?

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Jan 25, 2013 at 06:39

What will the Post Office have left? It has been shafted for years, certailnly not an investment opportunity I think. In the USA the US Mail is something sacrosanct, with heavy penalties for messing with the mail, akin to their worship of The Flag. Here the Post Office is something to sell on to an eager immigrant (am I allowed to sya that Mister Thought Policeman?) then shaft him by taking away all the services so its a pointlerss corner shop.

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Jan 25, 2013 at 06:40

I have had Permium Bonds since 1965. Never won a thing.

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Jan 25, 2013 at 15:20

@Martin: And when you do get your password, if you try to invest you get:

"an unexpected error has occurred, if it persists contact customer services"

who politely fob you off (I'll have to email somebody because they're not answering the phone) because it doesn't work for them either.

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roger elliott

Jan 25, 2013 at 22:32

I cashed all my premium bonds in because (as Martin Lewis suggests) it's a rubbish return for your money - unlike 'banjofred' I did win - £25 after 8 years !

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Tony Peterson

Jan 26, 2013 at 08:31

In the days when inflation was held within target PBs were an amusing source of income. Until the returns were forced below inflation four or so years ago my wife and I each held the maximum holding, with the result that most months there would be three or four prizes. Our annual returns averaged around 3.8%. When the BoE decided to save the BBTL brigade by forcing interest rates down during the credit crunch, we cashed in our PBs, withdrew all cash savings, and even cash isas, and put all the proceeds into high yielding equities, and pointed out to Citywire readers that this seemed to us the only rational response to the state's punishment of the prudent by rescuing the profligate.

Consequently, we have more than doubled the value of our savings. So thank you NS&I (along with the BoE and the Treasury). Your rubbish products have driven us to seriously good opportunities (which are still there) and still performing well.

Anyone who "invests" in Premium Bonds today is giving the value of their cash to the state voluntarily. It doesn't make investment sense. I won't be any less polite than that.

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