National Savings and Investments has cut the interest rates on some of its savings accounts by up to 0.6 percentage points. The Government-backed savings institution, which benefitted from huge inflows in the wake of the Northern Rock crisis, blamed falling gilt yields for the move.

Savers who invest £50,000 or more in NS&I’s 3-year fixed-rate savings bonds will be hit hardest. They will now receive just 5 per cent interest, down from 5.6 per cent. The rate on the 1-year Pensioners Guaranteed Income Bond has fallen from 5.3 per cent to 4.95 per cent while the 5-year Bond has dipped from 5.2 per cent to 4.7 per cent.

Mark Dampier, of Hargreaves Lansdown, the independent financial adviser, said: “Gilt yields have nosedived over the past month, but savers in NS&I are paying an extra premium for the safety of a government guarantee.” Savers who put their money in NS&I are guaranteed to get 100 per cent of their money back, unlike most other banks and building societies where only the first £31,700 of savers’ money is safeguarded.

NS&I, which has £80 billion in savings, said deposits into its savings accounts rose by 20 per cent in the month following the Northern Rock crisis.

Sue Hannums, of AWD Chase de Vere, another IFA, said: “It is a confusing time as some banks are increasing fixed savings rates while others are reducing them. Given the security that NS&I offer, they are perhaps less worried about keeping their rates competitive.”