Martin Lewis has issued important guidance to savers following the news interest rates are to be slashed in November.
National Savings & Investments (NS&I) announced plans for dramatic cuts to the interest it pays on many of its savings accounts, including Income Bonds, Direct Saver and Premium Bonds.
Sharing the news on social media Martin called it "a devastating blow for savers."
He tweeted: "NEWS: NS&I announces unprecedentedly large rate cuts on 24 Nov. Currently best buy across the board.
"Income Bonds drop from 1.15% to 0.01%
"Direct Saver drop from 1% to 0.15%
"Investment account from 0.8 % to 0.01 ISA & Junior ISA similar.
"Premium bonds rate also to be cut from 1.4% to 1% from December."
In his weekly newsletter, MoneySavingExpert.com founder Martin said: "Monday's announcement of massive rate cuts was therefore a huge shock".
State-backed NS&I had proved a positive hope for savers as its deals have been dubbed "best buys for months" as, according to Martin, "the Government, desperate to bring in cash, tasked it with raising £35 billion this tax year, up from the normal £6 billion."
Chief executive Ian Ackerley justified it by saying: "It is time for NS&I to return to a more normal competitive position for our products."
But Martin said this stance is "terrifying for savers, as its new rates are mostly just 0.01%", which works out at approximately 10p a year per £1,000.
Martin added: "Or to put it another way - nowt. So NS&I defines normal as nowt."
So what should savers do?
MSE advises NS&I may be anticipating further UK base rate cuts, even negative interest rates, and as it has to give two months' notice of cuts, so it could be trying to get in position now.
Regardless of the reasoning, it's likely to have an effect on other savings. Here's MSE's top tips for savers :
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Got debts or a mortgage? Overpaying often beats saving
For many, the best thing to do in the current climate is to clear debts. While savings rates are so low, many would be better off overpaying their mortgage with savings.
On his eponymous The Martin Lewis Money Show: Live, Martin said many people are often "surprised" to find themselves saving thousands through making overpayments on their mortgages.
Worried about rate deterioration? Lock in to top fixed savings as soon as possible
Until NS&I announced it was pulling rates, MSE had seen the top fixed rates creeping up.
Now, there's a worry the NS&I move will change market momentum. So if you're worried, locking away on a fixed rate now is protection - though things could always move the other way and MSE offers no promises.
