NS&I axes saving certificates
NATIONAL Savings and Investments (NS&I) delivered a blow to consumers’ purses yesterday as it axed its two inflation-beating savings products, citing particularly strong levels of demand.
NS&I said demand for the fixed interest and index-linked savings certificates had far outstripped its expectations and that its decision to pull the products was designed to prevent it exceeding the upper end of its net financing target set by the government. The body aims to broadly balance funds coming into NS&I with those going out, within a range of £2bn either side of zero. NS&I’s products are backed by the Treasury, meaning savers’ money is guaranteed.
Website, telephone and over-the-counter sales of the certificates were abruptly suspended yesterday morning, while postal applications were stopped at midnight last night.
NS&I also said it had reduced the interest rates paid on its direct saver and income bonds by 0.25 per cent.
The news came as NS&I announced it had delivered £1.6bn of net financing for the 2009-10 financial year.
“NS&I is extremely mindful of its responsibilities given its unique place at the heart of the UK savings sector,” said chief executive Jane Platt. “We continue to follow a policy of acting transparently and balancing the interests of our savers, the taxpayer and the stability of the wider financial services market.”