The government will launch a new bond which aims to give millions of savers a 2.2 per cent return on their cash, the chancellor of the exchequer announced today (23 November).
In his first Autumn Statement since being appointed chancellor in July, Philip Hammond said the new savings bond will be available through the government-owned provider, National Savings & Investment (NS&I).
The chancellor said the government wants to help those who rely on income from modest savings “to get by”.
“Low interest rates have helped our economy recover, but they’ve significantly reduced the interest people can earn on their cash savings.”
Mr Hammond said the detail will be announced at the March Budget, but that he expects the new investment bond to have an interest rate of around 2.2 per cent gross, and a term of three years.
However, he also pointed out this return might be adjusted to reflect market conditions when the product is launched.
This comes after data from the Financial Conduct Authority revealed some savings accounts were paying as little as 0.01 per cent.
Savers over the age of 16 will be able to deposit up to £3,000, with a minimum investment of £100.
The government expects around two million people to benefit from the new bond, which will be available for a year when it is launched in spring 2017.
