NS&I Pulls Savings Certificates

State-backed National Savings and Investments (NS&I) has withdrawn two inflation-beating savings products and has cut rates on other products because they were too popular. 

The group has pulled its saving certificates - both fixed interest and index-linked - and reduced rates on its Direct Saver and Income Bonds by 0.25% to rein in new business. 

It comes after the group recorded £5.4bn in gross inflows in the three months to the end of June - the highest first quarter results it has seen. 

Money which is left over for the Government after withdrawals and interest payments - net financing - came in at £2.4 billion. 

The decision marked "another door slammed in the face of savers", according to Andrew Hagger, of Moneynet.co.uk. 

He said it would drive more business to banks, adding that there was "nothing positive in today's announcement for the man on the street". 

NS&I is set a target each year for net financing by the Government and said this was at risk of being exceeded after just the first few months of the financial year due to saver demand.