NS&I’s inflation busters available barring spike in demand

National Savings & Investments index-linked savings account will likely be available through April of 2012 barring a spike in demand, according to fixed rate bonds experts.

With a promise to pay an interest rate of 0.5 per cent higher than inflation as measured by the retail prices index, the NS&I Index-linked Certificate was highly coveted by savers at its recent May relaunch.  Since then inflation as measured by the RPI has fallen from 5.5 per cent to 5 per cent, which has made savers slightly less zealous in taking out the five-year term bonds.

Jane Platt, chief executive for NS&I, stated that the government’s savings arm is determined to keep the bonds available for as long as possible.  However she could not supply specific dates, though industry experts believe that a best case scenario will be their continued availability through April of next year.

The Treasury authorised the NS&I to raise for it anywhere from £2 billion to £4 billion by May of 2012.  However this past June saw the savings arm crash through the £3.8 billion mark due to customer demand.

However, Ms Platt remarked that this figure will likely be adjusted to make room for new deposits.  This is due to a large number of bonds reaching maturity in the immediate future.

The NS&I chief executive said that the savings arm expected a spike in sales when it launched the index-linked certificates.  However, Ms Platt admitted to being taken aback by the zeal with which savers began snapping up the Index-linked Certificates.

Sales have since tapered off to a much more muted level, Ms Platt went on to say, indicating that drop-off had occurred with much more rapidity than NS&I had expected as well.

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