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NS&I withdrawals hits bond market

NS&I withdrawals hits bond market

Category: Investments

Updated: 04/01/2010
First Published: 19/11/2009

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

National Savings and Investments (NS&I) has withdrawn from sale its one and two year guaranteed growth bonds and guaranteed income bonds.

The government backed bank said the move would ensure it continued to balance the interests of savers, the taxpayer and the stability of the wider financial services marketplace.

"We always forecast a likely sales volume for our savings products, however due to the popularity of the one and two year issues, we have achieved our sales target more quickly than anticipated. We have therefore taken these issues off sale," said John Prout, Director of Customer Sales and Retention at NS&I.

The three and five year versions of the guaranteed growth bonds and guaranteed income bonds remain on sale.

The move represents another blow to the guaranteed income bond market, after Cardif Pinnacle announced the withdrawal of its products last week.

The firm said credit quality, coupled with low interest rates, had made it impossible to offer competitive guaranteed bond rates to its customers, although a return to the market has not been ruled out.

Speaking to Moneyfacts.co.uk, Richard Eagling, Editor of Investment Life and Pensions Moneyfacts, said: "In the past, guaranteed income bonds have been popular amongst cautious investors looking for a safe alternative to bank and building society deposits. Unfortunately, these latest product withdrawals will leave consumers with a far more restricted choice."

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.