NS&I cash inflow falls to lowest level for four years

The savings group attracted £15.3bn in the year to March, compared with £18.1bn the previous year and £26bn in 2009, when savers nervous about the health of the bank sector flocked to the group,

NS&I said it had to rein back saving last year, by scrapping the two inflation-linked certificates, as it was at risk of exceeding the financing target set by the Government after being swamped by demand from savers.

Inflows are set to rise this year after the Government increased its financing target to £2bn, from zero in the year to March, with £2bn leeway either side.

The group has already reintroduced one inflation-linked product, in May, despite other lenders complaining that the Government guarantee gives NS&I an unfair advantage.

Chief executive Jane Platt, who described last year’s performance as solid, said the group will monitor demand for the certificates carefully, but wants to keep the products on sale for a sustained period.

The group was formed in 1861 as the Post Office Savings Bank and became a Government department in 1969, when it was renamed National Savings.