THE TELEGRAPH: Savers have seen two of the most popular state-backed investment products withdrawn from the market amid the Government’s austerity drive.
National Savings & Investments has pulled its inflation beating and fixed interest savings certificates and cut rates on other products after seeing record inflows of cash.
The group feared demand from consumers could place too high a burden on the taxpayer, at a time when the public finances are under unprecedented strain.
The products had attracted more than a million savers with their promise of high returns and Government-guaranteed security.
The announcement is the latest blow to savers who have seen their income plummet at a time when most savings accounts fail to offer any real rate of return once inflation and tax are taken into account.
NS&I is tasked with raising a fixed amount for the Government coffers each year and can often offer better deals than commercial banks because it is not required to turn a profit.
It is even permitted to make a loss of up to £2bn, to the benefit of its customers. However, it feared this cap could be breached this year because of the unusually high level of demand as consumers seek a safe place to keep their cash as a result of the financial crisis.
Experts yesterday accused the Government of punishing the responsible behaviour of savers as it battles its own deficit. >>> Myra Butterworth, Personal Finance Correspondent | Monday, July 19, 2010
