National Savings & Investments (NS&I) has announced that it has withdrawn its popular Index-linked Savings Certificates with immediate effect. This is another blow for beleaguered savers.
The new Issues of Savings Certificates have been on sale for almost four months (since 12 May 2011) and have been very popular during this time. At the outset NS&I forecast strong sales and the original expectations have now been met. By taking action to withdraw the current Issue, NS&I will ensure that the Net Financing target set by the Chancellor for 2011/12 is not exceeded.
On maturity, existing Savings Certificate customers can keep their investment for another term of the same length. Alternatively they can reinvest into any of the other Savings Certificate terms and Issues on offer to existing customers – either the 3- or 5-year Issue of Index-linked Savings Certificates or the 2- or 5-year Issue of Fixed Interest Savings Certificates – regardless of which Savings Certificate they currently hold
Half a million transactions
Jane Platt, chief executive, NS&I, said of the decision to withdraw the certificates: ‘During the almost four months that Savings Certificates have been on sale, there have been approaching 500,000 transactions into the latest Issue of Index-linked Savings Certificates.
‘Over this period, we’ve seen significant amounts of money invested into these products. To ensure that we do not exceed the upper end of our Net Financing target range, we’ve taken the decision to withdraw Savings Certificates from general sale at this point.
‘The volume of sales over the past few months is such that our forecasts show we were at risk of exceeding the top end of the Net Financing range, so we needed to take action to reduce sales.’
Couldn’t last for ever
Paul Davies, savings analyst at Which?, added: ‘When the current Issue was launched in May we knew that the offer would only be available for a certain period of time. NS&I has limits on the amount of money they can collect, in order to meet government targets and to maintain fair competition in this area.
‘However, that’s not much consolation for savers looking to at least keep pace with the rate of inflation. People should check out the current Which? Best Rate instant access savings accounts and Best Rate fixed-rate bonds to get the very best rates in the market. Beating inflation will prove a challenge at the moment with the cost of living so high and the base rate so low.’
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