Saga welcomes return of National Savings Inflation Linked Savings Certificates

Massive missed opportunity as Chancellor fails to acknowledge plight of savers in his Budget

by Dr. Ros Altmann

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The Chancellor’s budget contained no good news for savers, warning of continued high inflation and boasting about low interest rates. Yet buried away in Annex B of the Red Book on page 90, there is a real gem. National Savings will be allowed to bring in revenue of £2billion next year. Previously the Government did not want NS&I to make much money, so they had to withdraw their hugely popular Inflation-Linked Savings Certificates, which paid 1% above rpi inflation. By taking them away, savers no longer had any safe way to protect themselves against high inflation and they have suffered hugely as a result. Without the National Savings inflation protected certificates, savers were forced into bank or building society accounts, which paid derisory returns that have fallen well behind rpi inflation. February’s rpi was 5.5%, no savings account pays that amount.

Bringing back NS&I certificates is something Saga has been calling for over the past few months and we are delighted to see that they will be issued again after April 2011.

National Savings has put out a Press Release and only the last line mentions this hugely welcome news. They will reissue their inflation linked certificates, and they will be linked to rpi, not cpi, which is even better news for savers, as rpi is consistently above cpi. We do not know exactly when they will be reissued, but it can’t happen soon enough. Dr. Ros Altmann, Director-General of Saga, said “Month after month, savers are seeing the value of their hard-earned savings whittled away by inflation. The sooner they can have some proper protection from National Savings inflation-linked certificates, the better.”