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Savers hit by NS&I changes
National Savings and Investments (NS&I) has dealt investors looking for the potentially higher returns of index-linked products a blow by withdrawing its saving certificates.
Both the Fixed Interest and Index-linked Saving Certificates are no longer available to new customers, with no date set for their return. In addition, the interest rates on its Direct Saver and Income Bonds have been cut by 0.25 percent.
As the institution is backed by the government, it has to operate within a
Net Financing target set by the Treasury, which ensures that it is unable to
dominate the market. High inflation rates and exceptional demand for its
products meant that NS&I was at risk of exceeding the upper range of this
year’s target, and so has taken these measures to reduce sales.
While savers currently holding these certificates will still be able to roll over their investment on the same terms when it matures or reinvest into any of the savings certificate terms and issues, those who own other NS&I assets will not be able to reinvest into the withdrawn products.
