National Savings & Investments has withdrawn its popular fixed interest and index linked savings certificates from sale after they threatened to exceed the net financing target set by the Chancellor for 2011-12.
The new issues of the products have been on sale for four months, NS&I says it forecast strong sales of the product which have now been met.
The NS&I website and call centres stopped taking new sales of the savings certificates at the close of business on September 6, 2011, while postal applications after September 7, 2011, will be returned to the customer.
The inflation-proofed bonds were withdrawn from sale in July 2010 because of excessive demand, but the government said the chancellor’s decision at the 2011 budget to increase the net financing target by £2bn for NS&I allowed NS&I to re-introduce the savings certificates in May 2011.
On maturity, existing savings certificate customers can keep their investment for another term of the same length. Investors can also reinvest into any of the other savings certificate terms and issues on offer to existing customers. These include 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.
NS&I chief executive Jane Platt says: “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.
“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.”