Savers who purchased one-year ‘Pensioner Bonds’ from National Savings & Investments (NS&I) will see interest rates plummet when the products start maturing in January.These bonds, which were issued between January and May 2015, currently pay 2.8%. By default, maturing bonds will be automatically transferred into NS&I’s Guaranteed Growth Bonds, which pay 1.45% over one year.People holding 3-year pensioner bonds, which pay 4%, are unaffected.Explaining NS&I’s decision not to extend the scheme, a spokesperson said: “65+ Bonds were a special Issue designed to support older savers over a 1-year or 3-year investment term. As with all our standard products, the interest rates on NS&I’s Guaranteed Growth Bonds are set to balance the interests of savers, taxpayers and the wider market whilst offering a 100% guarantee.”Over-65s were allowed to hold up to £10,000 within Pensioner Bonds, so the worst case scenario is they'll switch to the one-year guaranteed growth bond and receive £135 less interest next year (before tax). They can get better rates by switching elsewhere though. United Trust Bank currently offers the best rate on a one-year fixed rate bond, paying 2.15% AER on deposits over £500. Someone transferring £10,000 would earn £215 interest before tax, or £80 more than they’d get by staying with NS&I.Alternatively, First Save pays 2.12% AER, or £3 less than United Trust Bank on a £10,000 deposit. Both accounts are covered by the Financial Service Compensation Scheme, meaning deposits up to £75,000 are guaranteed by government, though this includes any other savings with the same institution.If savers can lock their money away for longer, NS&I has a five-year option for its Guaranteed Growth Bond, which pays 2.55% AER (£255 a year on £10,000), which is available to people with maturing Pensioner Bonds. In the open market, they could receive 3.15% AER (£315 a year) with AgriBank on the same terms.NS&I will write to all bond holders to explain their options 30 days ahead of their maturity date, which will occur between January and May, depending on when the bonds were purchased. The government-backed deposit taker has said customers will no longer be able to submit instructions over the phone, despite the original terms and conditions permitting this, and so they will need to do so online or by post.