Yup, you read right. They've had too much money pouring in (no surprises there in comparison to the paltry rates available on the open market, and the 50% tax band). Reinvestment of matured certificates is still permitted:
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NS&I today (19 July 2010) announced that its Savings Certificates (both Fixed Interest Savings Certificates and Index?linked Savings Certificates, also known as Inflation-Beating Savings) have been withdrawn from general sale and that it is reducing the interest rates paid on its Direct Saver and Income Bonds by 0.25% with immediate effect. Sales volumes in recent months across all three products have far exceeded those either anticipated or required by NS&I. ... We?ve seen significant amounts of money invested into these products over recent months and so we?ve taken the difficult decision to withdraw Savings Certificates from general sale and reduce the interest rates paid on our Direct Saver and Income Bonds. This is designed to ensure that we do not exceed the upper end of our Net Financing target range."On maturity, existing Savings Certificate customers can continue to rollover their investment into the same Issue they currently hold. However, as Savings Certificates have been withdrawn from general sale, customers who have invested in other NS&I products will not be able to reinvest their money into Savings Certificates.
I've never known sales been stopped: I've known a particular issue been stopped to be replaced by another, but this is new territory.