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Savers pounce on NS&I after it ditched plans to slash rates

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Hard-pressed savers have flooded National Savings & Investments (NS&I) after its accounts topped best-buy tables.

But, as investments in the bank’s easy-access account rose by nearly a quarter, it has struggled to cope with demand in lockdown and has seen a rise in complaints in May.

A total of £3.58 billion went into NS&I’s Direct Saver, which pays 1 per cent, in the year to the end of March — the most since the account was launched in 2010.

As investments in NS&I’s easy- access account rose by nearly a quarter, it has struggled to cope with demand in lockdown and has seen a rise in complaints in May

As investments in NS&I’s easy- access account rose by nearly a quarter, it has struggled to cope with demand in lockdown and has seen a rise in complaints in May

As investments in NS&I’s easy- access account rose by nearly a quarter, it has struggled to cope with demand in lockdown and has seen a rise in complaints in May

The 24.4 per cent increase on the previous year, to £18.2 billion, compares with just a 5.3 per cent rise in money saved into easy-access accounts with big banks.

A further £3 billion poured into NS&I Income Bonds, up 16 per cent to £21.8 billion — the second largest increase on record since the bonds, which pay 1.15 per cent, went on sale 35 years ago.

In the meantime, nearly £7 billion was also invested in Premium Bonds — just behind the record of £7.7 billion four years ago.

NS&I reports that the number of its customers saving regularly has soared, putting aside an average £1,300 a month.

Savers have flocked to NS&I after it abandoned plans to slash rates, while other banks have continued to cut theirs.

Yet the amount of money NS&I aims to bring in from savers for the current financial year is £6 billion, around half the £11.6 billion (plus or minus £3 billion) of last year.

NS&I raises money for the Government as an alternative to selling bonds in the money markets. 

Currently, it is the more expensive way to borrow, because interest paid on bonds is so low. 

Between April and June, the Government was willing to pay over the odds in a move to support savers. This week, NS&I was unable to say whether this will continue, so its rates could fall.

An NS&I spokesman says: ‘The target, which is set by HM Treasury, will be subject to in-year revision to reflect government finance requirements arising from Covid-19.’

However, customer complaints continue to rise. In May, they hit 2,384, up two-thirds on the 1,433 in the same month last year.

Dave Gibson, 68, from Stroud, Gloucs, was kept on hold for 40 minutes when he rang the bank to discuss a missing Premium Bonds payment of £5,000. He says: ‘It was very stressful when I didn’t know what had happened to the money.’

An NS&I spokesman apologised to those having issues, adding: ‘We ask customers to use the NS&I website where possible.’

sy.morris@dailymail.co.uk

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Search for elusive former boss of Wirecard intensifies

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The search for an elusive former boss of collapsed payments giant Wirecard intensified last night after it emerged his reported flight to the Philippines was faked. 

Jan Marsalek, Wirecard’s former chief operating officer, has not been seen since the firm filed for insolvency last week. 

It had been claimed he flew into the Pilipino capital Manila on June 23 and left for China the next day. 

Vanished: Jan Marsalek, Wirecard's former chief operating officer, has not been seen since the firm filed for insolvency

Vanished: Jan Marsalek, Wirecard's former chief operating officer, has not been seen since the firm filed for insolvency

Vanished: Jan Marsalek, Wirecard’s former chief operating officer, has not been seen since the firm filed for insolvency

But a probe by the country’s justice secretary, Menardo Guevarra, has now established that immigration records of his journey were bogus. 

CCTV footage was also reviewed and officials were unable to discover any trace of the executive arriving or departing. 

‘We have established that Jan Marsalek did not arrive in the Philippines on June 23 based on CCTV footage, airline manifests, and other records,’ Guevarra told the Financial Times. 

‘The investigation has now turned to the persons who made the false entries in the database, their motives, and their cohorts.’   

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Britain’s grocers gearing up for massive price war

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Britain’s grocers are gearing up for a massive price war amidst fears unemployment could rise above four million. 

More than 14,000 jobs were lost this week as a coronavirus jobs bloodbath hit the economy. 

The jobs cull has left supermarket bosses scrambling to show they are competitive on price as household budgets are squeezed due to the crisis. 

They are worried that the German discounters Aldi and Lidl will repeat the sort of market-share gains made after the 2008 financial crash. 

This week, one industry source said: ‘Price is going to be everything over the rest of the year.’ 

Food price inflation has risen to 4 per cent, running far ahead of the 0.5 per cent rate of inflation, putting yet further pressure on household budgets. 

Since the coronavirus pandemic has struck, Sainsbury’s have lowered prices on 300 products, on top of their eight-week ‘price lock’ on 1,000 of their items. 

Chief executive Simon Roberts said: ‘With rising unemployment pressure on consumer spending we’ve got to make sure our offer is really relevant. 

‘We’ve been putting a lot of emphasis on the value in our offer and invested in price. We have taken gains from discounters.’ 

Morrisons said it had cut ‘and held down’ the price of 450 customer favourites, adding in half-price promotions such as, this week, half-price beef brisket and mackerel. 

And last week Tesco, Britain’s largest supermarket, doubled down its price war expanding its ‘Aldi price match’ promise to 500 everyday items. 

Tesco chief executive Dave Lewis said: ‘I don’t see why anyone should pay more for a brand at Tesco than anywhere else.’ 

The supermarket claimed it had seen net switching gains of customers to Tesco from Aldi ‘for the first time in over a decade’. Aldi and Lidl have always claimed that, despite promotions, their products remain as much as a fifth cheaper than those offered by rivals. 

'Price lock': Sainsbury's chief executive Simon Roberts

'Price lock': Sainsbury's chief executive Simon Roberts

‘Price lock’: Sainsbury’s chief executive Simon Roberts

But the Big Four grocers have found a trump card during the pandemic in online shopping. 

They have been able to double their capacity during the lockdown gaining thousands of new customers, with many experts saying the trend of buying online will not go away soon. 

Tesco, Sainsbury’s, Asda and Morrisons are delivering to 2.8m households each week, while the discounters are close to zero. That compares to around 1.5m before the pandemic. 

Next week Chancellor Rishi Sunak will deliver his plan for rebooting the economy. 

Opposition leader Keir Starmer called it the ‘last chance to save hundreds of thousands of jobs’. 

But hundreds of thousands of jobs have already been lost during the lockdown, and this week some major companies went into administration, or shed staff, in an attempt to survive. 

There is a particular concern for the retail and the hospitality sector – that today takes its first steps out of lockdown with many pubs and bars opening – which have been starved of cash for the last 14 weeks. 

At the same time, businesses are facing up to the furlough scheme being pared back from August 1.

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Fuller’s boss urges Chancellor to cut VAT

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Fuller’s boss has urged the Chancellor to cut VAT to prevent thousands of job losses across the hospitality industry. 

As Britain’s pubs finally begin to reopen today, Simon Emeny said cutting the levy on goods and services is vital to entice punters back to their pubs and avoid wholesale redundancies.

Emeny, who said he would be heading straight into a pub as soon as they open at midday, is planning to reopen just 27 of Fuller’s 215 own-managed inns today. 

Stimulus: Simon Emeny said cutting the levy on goods and services is vital to entice punters back to their pubs and avoid wholesale redundancies

Stimulus: Simon Emeny said cutting the levy on goods and services is vital to entice punters back to their pubs and avoid wholesale redundancies

Stimulus: Simon Emeny said cutting the levy on goods and services is vital to entice punters back to their pubs and avoid wholesale redundancies

The remainder of its 177 pubs, which are run by tenants, should all be open by the end of next week. He told the Mail: ‘Pubs are an enormous employer, but clearly what none of us know is what demand will be like when we reopen. 

‘If we’re going to bring all of these employees back to work, we’re going to need the Government to bring in stimulus.’ 

He said that VAT should be temporarily lowered from its current rate of 20 per cent down to 5 per cent. 

Chancellor Rishi Sunak has come under pressure to cut VAT in his emergency summer statement on Wednesday, in which he will lay out plans to kick-start the economy. Sunak is said to have cooled on the idea, telling Tory MPs not to expect big tax cuts. But, according to the Financial Times, he will also study how England reacts to the reopening of pubs before making a final decision. If there is evidence of pent up demand then a VAT cut may be deemed unnecessary. 

Many worry that today, which has been dubbed ‘Super Saturday’, could see thousands descend on their local after weeks of being restricted to drinking at home.

Emeny is not too concerned: ‘People go to pubs to socialise with their friends and families, and I think they’ll behave well.’

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