Older savers will be hit by a significant cut to the returns on popular index-linked Savings Certificates from next year.
Returns on the National Savings and Investments (NS&I) product are to track a less generous measure of inflation.
The announcement, three days before the Budget, will benefit the Treasury by £610m over the next five years.
However, it will be a disappointment to 507,000 savers, with an average age of 65, who hold these certificates.
One expert said this was a "massive blow" to these savers, who collectively hold £19.9bn, but it was a surprise the cut had not come sooner.