NS&I delivers positive financing forecast

In a statement, the government-owned savings bank said that according to the value indicator, a measure of cost-effectiveness of raising government finance, it delivered £57m of value to the taxpayer in the quarter.

It forecast a £299m return in 2014/2015, which it said was in line with the target set at the 2014 Budget.

Its net financing forecast for 2014/15 is £18.3bn, above the range of £11bn to £15bn set in the 2014 Budget, and net financing target for that period of £10bn, within a range of £8bn to £12bn.

“This is due to a number of factors, most notably the unprecedented demand for pensioner bonds when they went on sale in January and the removal of the £10bn ceiling on sales.

“The increase in the premium bonds investment limit to £40,000 a person in June, followed by the introduction of a second £1m prize each month, also proved very popular with customers,” NS&I said in a statement.

Earlier in March, its quarterly savings survey revealed that more people saved during 2014 than at any time in the past decade.

Data showed that the average monthly savings last year rose to £113.77, 9.25 per cent higher than in 2013 and the highest share of monthly pay saved since NS&I began its survey in 2004.

The popularity of its pensioner bonds, which were announced in 2013, was not reflected in the calculation, it said, as it is a Budget measure distinct from NS&I’s normal activity.

Since January, NS&I has sold £10bn pension bonds to 825,000 customers.

Adviser view

Robin Melley, director of Shropshire-based Matrix Capital, said: “Compared with other rates NS&I products are not bad. Their products are the only ones not restricted by the FSCS to £85,000, so there is a 100 per cent guarantee.”

Quarterly figures:

Source: NS&I

*C&AIP is capitalised and accrued interest and prizes earned