National Savings & Investments, the government-owned deposit-taker, has boosted a range of interest rates by up to 1.2 percentage points, amid intense competition for savers’ cash among banks and building societies.

NS&I’s Direct Individual Savings Account (Isa) is paying 2.5 per cent, up from 1.3 per cent previously. Its tax-free fixed-interest savings certificates now offer 1.25 per cent for two years or 2.25 per cent for five years. Rates on Children’s Bonus Bonds have risen to 2.5 per cent.