NS&I savers are being warned interest rate cuts could be just around the corner as new figures show the Government-backed savings provider has already reached its fundraising target for the 2023/24 tax year.

Figures released by NS&I, which also provides Premium Bonds, showed it delivered £7.7 billion of net financing in the second quarter of 2023/24, bringing its half-year total to £9.8 billion.

Its net financing target for 2023/24, set at the spring budget 2023, is £7.5 billion, with room for manoeuvre of plus or minus £3 billion.

Savers may need to brace themselves for rate cuts on NS&I accounts and for the Premium Bond prize fund to fall, an expert stated.

Laura Suter, head of personal finance at AJ Bell, said: “Savers should brace themselves for rate cuts on NS&I accounts and for the Premium Bond prize fund to fall – as the Government-backed provider has already exceeded its fundraising target for the tax year.”

Commenting on the fugures she said: “It gives the provider generous wiggle-room of £3billion either side of that target, meaning it can only raise another £700m in the next six months before it breaches its extended target.

“All this technical detail has a direct impact on savers, who will see NS&I accounts become less attractive in the coming months. The Government-backed provider raises rates to draw more savers in – if it doesn’t need to attract any more money it will cut those rates.

“It has to play a delicate balancing act to avoid mass withdrawals that counteract the inflows it’s already seen this year – so a slow and steady approach to cuts is more likely than a giant axe to rates.”

NS&I has already pulled its guaranteed bonds and cut the rate on its Green Savings Bond, but it’s “highly likely” that other accounts will be up for the chop too.

Over the past two years NS&I has hiked the effective prize fund on Premium Bonds – taking it to a 23-year high in August – and often making it the market-leading account. But as other providers take the axe to savings rates, NS&I will follow suit, she said.

Ms Suter stated: “This is another sign for savers to shop around and nab the best rates before they fall further.

“Moneyfacts data shows that the interest rates on fixed rate bonds are falling already, giving further fuel to the idea that savers may have already seen the best that savings rates have to offer.”

NS&I, which has 24 million customers, has a duty to balance the interests of savers, taxpayers and the broader financial services sector.

Money held with the savings giant has 100 percent security, as it is backed by the Treasury.