The cuts came into effect last week, and the 1.35 per cent has been shaved off the NS&I; fixed rate savings account products for new customers. This reduction has not affected savings already invested in NS&I;’s fixed rate savings.

Other National Savings & Investments products to be affected include most of its variable rate savings accounts, with cuts of up to 0.75 per cent across the board as the rates are influenced by the Bank of England’s base rate.

Meanwhile, NS&I;’s Premium Bonds prize fund has remained unchanged at 1.8 per cent, and will remain at this until after the March draw.

Since the Bank of England began cutting interest rates last October, many savings providers have followed suit. So much so that, according to the Bank of England, the average rate on an instant access savings account is now just 0.51 per cent.

A statement said: “NS&I; is reducing the interest rates on most of its variable rate savings offers following movements in the Bank of England base rate.”

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