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NS&I withdraws popular bonds

NS&I withdraws popular bonds

Category: Savings

Updated: 18/12/2009
First Published: 11/12/2009

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 It is now over 6 months old so the content may be out of date.

National Savings & Investments (NS&I) has withdrawn its three and five year issues of its Guaranteed Growth Bond and Guaranteed Income Bond.

The loss of the products from the savings markets comes just a few weeks after the Government backed bank pulled its one and two year bonds, a decision that Richard Eagling, editor of Investment Life & Pensions Moneyfacts, said would leave consumers with a far more restricted choice.

This latest withdrawals mean the three and five year issues of the bonds, which offered interest at between 4.3 per cent and 4.6 per cent, were on the market for less than two months.

Earlier this week, Moneyfacts.co.uk revealed that since the beginning of November, 62 per cent of the product changes in the savings market have been withdrawals. Where replacements have been launched, the rate has been less than the original product in the majority of cases.

"It is not unusual in today's climate that savings bonds are prematurely withdrawal due to them being over subscribed. Recently, a Melton Mowbray BS product was withdrawn from the market after only one day," commented Darren Cook, spokesperson for Moneyfacts.co.uk.

"NS&I have traditionally been popular with the mature saver and it also has the added feature that public perception is that NS&I is safer than your high street bank.

"Due to the Governments interest in NS&I, we are aware that directives exists that the maximum sales targets can not be exceeded but we are unable to ascertain what these levels are.

"The current withdrawn products were not as competitive as the shorter term products which were withdrawn three weeks ago."

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