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Savings ‘flight to safety’ is now over says NS&I

23 July 2009 / by Andy Davies

Savers, who chose to invest in National Savings & Investments to secure their money at a time when high street banks were struggling, are now withdrawing their savings as the ‘flight to safety is over’.

According to results published by NS&I, nervous investors who invested their savings in the government-owned NS&I are now feeling the time is right to return to their banks.

These withdrawals have hit NS&I’s finances as net sales for the first quarter of this year fell by an estimated £1billion.  

This is compared to annual figures for 2008/09 when the company’s net sales totalled £12.5billion as depositors moved quickly to ensure their savings would not be affected by the economic downturn.

Reacting to the news, Jane Platt, chief executive of NS&I, said: “The global financial crisis, which began last September, meant that demand for our products increased dramatically despite us cancelling all discretionary marketing and led to us delivering £12.5billion of Net Financing last year.”

As a result of changing markets, NS&I will now focus on maintaining its customer balance, as opposed to attracting new business. Ms Platt adds:

"Our decision-making is now driven by the need to maintain a balance between offering a fair rate to our customers, delivering cost-effective finance to the Government, and the need to support stability across the wider financial services marketplace by maintaining an appropriate competitive position."

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