Middle Britain flocks to 'safe house' NS&I

The Northern Rock crisis was one more boost for Treasury-backed products, writes Julian Knight, although security can come at a price

National Savings & Investments (NS&I), the Treasury-backed savings body, is riding a wave of renewed investor interest and has seen a surge in deposits since the Northern Rock crisis broke last month.

Jonathan Akerman of NS&I says the Treasury's backing is its "unique selling point": "Whenever there is a perceived risk, people come to us."

Independent financial advisers (IFAs) point out that NS&I's resurgence goes back further than the Northern Rock bail-out.

"National Savings has definitely upped its game," says Susan Hannums, savings manager at IFA AWD Chase de Vere. In particular, Ms Hannums likes the look of the National Savings tax-free products – its Direct individual savings account (ISA) and index-linked certificates. "The ISA is a fantastic account. It pays 6.3 per cent and is very simple with no hidden nasties," she says.

The index-linked certificates also offer attractive returns. "The five-year certificate pays 1.35 per cent above the retail price index," says Ms Hannums. "At present, this adds up to a tax-free return of 5.45 per cent. For higher-rate taxpayers, in particular, this is good."

But the big thing for many investors with NS&I, whose offerings also include premium bonds, seems to be its ultra-safe reputation. In addition, NS&I products can be purchased easily and conveniently at the post office, by phone or online.

However, there is a price to be paid for security and convenience, says David Kuo, head of personal finance at advice website Motley Fool: "Some of National Savings' offerings have improved but many still lag behind what the high street has to offer." He cites NS&I's easy access account, which pays 2.6 per cent on balances of between £100 and £1,000. "This is substantially below the best on the market, which is an Anglo-Irish bank account paying 6.1 per cent."

Nevertheless, NS&I is pulling in the crowds. "Twenty years ago National Savings was there for elderly risk-averse savers and children," says Jonathan Fry of IFA Jonathan Fry & Co. "What's happened is that thrifty, middle-class, middle-Britain people now view NS&I as a viable option."

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

    Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

    £50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

    Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

    £13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

    Ashdown Group: Training Programme Manager - City, London

    £40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

    Day In a Page

    Where the spooks get their coffee fix: The busiest Starbucks in the US is also the most secretive

    The secret CIA Starbucks

    The coffee shop is deep inside the agency's forested Virginia compound
    Revealed: How the Establishment closed ranks over fallout from Loch Ness Monster 'sighting'

    How the Establishment closed ranks over fallout from Nessie 'sighting'

    The Natural History Museum's chief scientist was dismissed for declaring he had found the monster
    One million Britons using food banks, according to Trussell Trust

    One million Britons using food banks

    Huge surge in number of families dependent on emergency food aid
    Excavation at Italian cafe to fix rising damp unearths 2,500 years of history in 3,000 amazing objects

    2,500 years of history in 3,000 amazing objects

    Excavation at Italian cafe to fix rising damp unearths trove
    The Hubble Space Telescope's amazing journey, 25 years on

    The Hubble Space Telescope's amazing journey 25 years on

    The space telescope was seen as a costly flop on its first release
    Did Conservative peer Lord Ashcroft quit the House of Lords to become a non-dom?

    Did Lord Ashcroft quit the House of Lords to become a non-dom?

    A document seen by The Independent shows that a week after he resigned from the Lords he sold 350,000 shares in an American company - netting him $11.2m
    Apple's ethnic emojis are being used to make racist comments on social media

    Ethnic emojis used in racist comments

    They were intended to promote harmony, but have achieved the opposite
    Sir Kenneth Branagh interview: 'My bones are in the theatre'

    Sir Kenneth Branagh: 'My bones are in the theatre'

    The actor-turned-director’s new company will stage five plays from October – including works by Shakespeare and John Osborne
    The sloth is now the face (and furry body) of three big advertising campaigns

    The sloth is the face of three ad campaigns

    Priya Elan discovers why slow and sleepy wins the race for brands in need of a new image
    How to run a restaurant: As two newbies discovered, there's more to it than good food

    How to run a restaurant

    As two newbies discovered, there's more to it than good food
    Record Store Day: Remembering an era when buying and selling discs were labours of love

    Record Store Day: The vinyl countdown

    For Lois Pryce, working in a record shop was a dream job - until the bean counters ruined it
    Usher, Mary J Blige and Will.i.am to give free concert as part of the Global Poverty Project

    Mary J Blige and Will.i.am to give free concert

    The concert in Washington is part of the Global Citizen project, which aims to encourage young people to donate to charity
    10 best tote bags

    Accessorise with a stylish shopper this spring: 10 best tote bags

    We find carriers with room for all your essentials (and a bit more)
    Paul Scholes column: I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England

    Paul Scholes column

    I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England
    Jessica Ennis-Hill: 'I just want to give it my best shot'

    Jessica Ennis-Hill: 'I just want to give it my best shot'

    The heptathlete has gone from the toast of the nation to being a sleep-deprived mum - but she’s ready to compete again. She just doesn't know how well she'll do...