1 min Read
19 Jul 2010

Written by Damien

Damien is one of the most widely quoted money and investment experts in the national press and has made numerous radio & TV appearances. He created MoneytotheMasses.com while working in the City when he became disillusioned with the way the public were left to fend for themselves because they could not afford financial advice.

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Newsflash: National Savings pull inflation linked products

Government-backed National Savings & Investments (NS&I) have announced that they've pulled two popular inflation-beating products and slashed rates on other products after seeing record inflows of cash.

NS&I, whose profits go to the Treasury, said it saw £5.4 billion in gross inflows during the three months to the end of June - the highest for the first quarter of its financial year since comparable records began. (full story can be found here)

The withdrawal of these investments is a bitter blow to savers, and in particular pensioners.  Regular readers were already aware of the benefits of inflation linked national savings certificates from my post Money tip #30 – One way to protect your savings from inflation, both tax and risk free. With today's record low-interest rates coupled with inflation running at 5%, index-linked certificates offered a risk-free alternative to term based bank deposits - but with tax-free returns guaranteed to beat inflation. These products would have been particularly popular with pensioners living off their savings - but alas all good things come to an end. (More than likely as a result of increased demand from high rate tax payers for whom they offered a great tax saving opportunity)

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