NS&I introduces exit penalties for savers
Savers could incur penalties when they withdraw money early from popular National Savings & Investments (NS&I) accounts.
Customers with index-linked savings who roll their money over into new certificates from 20 September stand to lose 3.2% in returns from early withdrawals.
NS&I savings certificates pay 0.25% above the retail prices index measure of inflation, which currently stands at 3.2%.
Previously, savers could cash in early after a year, and it would only cost them the extra interest on top of the index-linked amount.
This was a popular option, as savers could withdraw money from fixed accounts if they thought inflation would fall, or they needed the money early.
In future, customers will leave with just 0.19% interest on the amount they withdraw for the year. And the amount they withdraw will be stripped of 90 days' interest and index-linked returns.
If your certificate matures before 20 September however, the same rules still apply.
Savers will not be affected by changes until the end of their investment term.
An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).