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Societies facing threat from Nat Savings

The Building Societies Association is worried that the Government may use National Savings & Investments to raise further funding and funnel much-needed investor deposits away from mutuals.

The BSA says due to the Government’s need to borrow more money, rates with the National Savings & Investment scheme will become more competitive in an attempt to lure retail deposits and could discourage savers from putting money in societies.

Policy director Neil Johnson says: “Building societies are limited by legislation to fund lending through their retail deposits.

“If NS&I becomes more competitive, people may choose to save there and not with a mutual. This could affect societies’ ability to raise funds.”

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