NS&I Pulls Saving Products Amid Austerity Drive
THE TELEGRAPH: Savers have seen two of the most popular state-backed investment products withdrawn from the market amid the Government’s austerity drive.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

Fraud Alert on Premium Bonds
TIMES ONLINE: Fraudsters appear to be targeting cheques sent in the post by National Savings & Investments

A Times Money reader has issued a warning to all Premium Bond holders to be on their guard after his attempt to pay in a cheque triggered a security alert.

Tariq Sheikh, 30, a photographer, from Kent, withdrew £2,000 from his Premium Bond account by post in April and deposited the cheque at his local Halifax bank branch.

But when he tried to use his bank card to book an airline ticket two days later, the card was declined. When he rang Halifax he was told that his account had been suspended because of suspected fraud.

In an attempt to deal with the problem, Mr Sheikh went to his branch the next day with proof of ID. He says: “I was told that Halifax would not remove the freeze on my account until it had received confirmation from National Savings & Investments (NS&I) that I was the rightful owner of the £2,000 cheque I had deposited.

“When I questioned why this was necessary, the manager said that Premium Bond cheques were being altered and deposited into other people’s accounts rather than those of the intended recipients. It was possible that cheques were being intercepted before they reached their proper destination. There was a concern that my cheque might be one of these so I had to wait for three hours until NS&I faxed details to Halifax to confirm that I was the rightful owner.” >>> Mark Atherton | Saturday, May 23, 2009