NS&I to restore popular products

Sam Jackson

March 25, 2011

November 13, 2018

NS&I to restore popular products

Savers are currently facing an uphill battle against inflation, but there are signs that this could be about to improve.

National Savings and Investments (NS&I) is planning to relaunch its inflation-beating savings products almost 12 months after they were withdrawn.

Consumers using these products are able to stop their funds being eroded by inflation because they pay returns linked to the Retail Prices Index (RPI) instead.

NS&I pulled the certificates, which can be taken out over three or five years, in July last year as high inflation and low interest rates created a surge in demand.

This upturn in public interest put the organisation in danger of exceeding its annual government financing target.

But following Chancellor George Osborne's announcement of a new financing target of £2 billion for 2011/12 for the group, NS&I should be able to restore the popular products.

The group later issued a statement saying: "Subject to market conditions, NS&I expect to be bringing savings certificates back on general sale in 2011/12."

Exact details of the product and when it will be launched are not yet known, but previous index-linked savings certificates have paid an annual return based on the changes to RPI during the previous year and a set interest rate.

Currently, savers are struggling with the Consumer Prices Index reaching a 28-month high of 4.4% in February, while RPI rose to 5.5%.

The increase meant there were just eight savings accounts that enabled basic rate taxpayers to stop the value of their money being eroded in real terms once inflation and tax were taken into account, and none that enabled them to beat RPI inflation.

Sam Jackson

Money Dashboard

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