NS&I 2013-14 annual results

  • NS&I delivers £3.4 billion of Net Financing and £346 million of savings to the taxpayer
  • New outsourcing contract will grow NS&I’s digital services, improve customer service and save taxpayers more than £400 million over next seven years
  • Premium Bonds holding limit now increased to £40,000 and second monthly £1 million prize from August
  • Customer improvements introduced including payments in many foreign currencies and 24/7 call centre

NS&I today announced its annual results for the year to 31 March 2014. Key points include:

Delivering key financial targets in 2013-14

NS&I delivered £3.4 billion of Net Financing – meeting its revised Net Financing target of £2 billion in a range of £2 billion either side of this (1). NS&I delivered £346 million of savings to the taxpayer – using the Value Indicator measure to calculate how much more cost-effective it is to raise funds through NS&I than via government bonds (2). NS&I’s efficiency ratio – a measure of the cost of administering money invested with NS&I – improved further in 2013-14, hitting 14 basis points (against 16 basis points in 2012-13 and 17 basis points in 2011-12).

Delivering for customers

In December 2013, NS&I extended its UK call centre opening hours so they are now open 24 hours a day, seven days a week – giving customers more flexibility in how and when they contact NS&I. In June 2014, NS&I launched a new service enabling customers to have payments from NS&I made directly to an international bank account in their own name. The service is targeted at those NS&I customers (for instance, ex-pats) who are resident in a number of other countries (3) or those who have a second home abroad. During 2013-14, NS&I also continued to grow its business-to-business services using its infrastructure to process payments for other government clients.

New outsourcing contract begins

NS&I’s new outsourcing contract with Atos began on 1 April 2014 and will save taxpayers more than £400 million over the next seven years by increasing customer use of direct sales channels; improvements in technology and processes which deliver cost savings; and supporting the growth of NS&I’s leveraging activity. The new contract will also help customers make the switch to easy-to-use digital channels and further improve the current online experience. NS&I first outsourced its operations in 1999. On a ‘like-for-like’ basis, stripping out the impact of growth and inflation, this contract is estimated to have reduced NS&I’s core operating costs by 55% – equating to some £530 million in cost savings .

Delivering the Budget’s measures for savers

On 1 June 2014, the maximum holding limit for Premium Bonds was raised from £30,000 to £40,000. A second monthly £1 million prize will return from August 2014. In January 2015, NS&I will issue market-leading one and three-year savings bonds for people aged 65 and over.

To enable NS&I to deliver this, its 2014-15 Net Financing target will be £13 billion in a range of £2 billion either side of this. NS&I’s Value Indicator target for 2014-15 will again be to produce positive value. The savings bonds for older savers are a specific Budget measure distinct from NS&I’s normal activities and therefore NS&I’s Value Indicator target for 2014-15 excludes the cost of this product.

Jane Platt, Chief Executive, NS&I, said:

“Over the last seven years we have transformed NS&I: modernising our systems, simplifying our products and delivering real savings for the taxpayer. Our customers have been at the heart of this transformation and in the coming years we aim to make it even easier for them to save and invest with us.

“In a growing retail savings market in 2013-14, we achieved our key financial targets: delivering £3.4 billion of Net Financing and £346 million savings for the taxpayer as measured by the Value Indicator. We achieved this while continuing to balance the interests of our savers, taxpayers and the stability of the broader financial services sector.

“I’m proud that the robustness of our systems means we are trusted to deliver key government initiatives – like the new bonds for older savers and the changes to Premium Bonds.”

2013-14 annual results:

Year Gross inflows C&AIP* Gross outflows Net Financing Total stock Value Indicator
2013-14 (inc. Q4) 16.4 2.0 14.9 3.4 105.7 0.3
2012-13 11.7 2.3 14.7 -0.7 102.2 -0.2
2011-12 18.3 2.4 16.7 4.0 102.9 0.4
2010-11 15.3 2.7 17.9 0.1 98.9 0.8
2009-10 18.1 1.9 18.4 1.6 98.8 1.4

All figures are in £ billion and subject to rounding. *Capitalised and accrued interest and prizes earned.

View NS&I’s full Annual Report and Accounts and Product Accounts 2013-14

Notes to Editors

  1. NS&I’s original Net Financing target for 2013-14 was £0 (in a range of £2 billion either side of this). In the Autumn Statement in December 2013, to ensure that NS&I continued to meet its operating framework of balancing the interests of its savers, taxpayers and the stability of the broader financial services sector, NS&I’s target was revised to £2 billion (in a range of £2 billion either side of this, from £0 to £4 billion).
    Net Financing is the measure of the net change of NS&I funds, meaning total inflows from deposits, retention of maturing monies and capitalised and accrued interest, less the total outflows from withdrawals and interest or Premium Bond prize draw payments.
  2. Value Indicator is an indication of NS&I’s cost-effectiveness in raising finance for the Government. It compares the total cost of delivering Net Financing and servicing existing customers’ deposits with how much it would cost the Government to raise funds through the wholesale market via equivalent maturity gilts and Treasury Bills.
  3. Countries that customers can make transfers to using NS&I’s International Payments Service include the 18 countries in the Eurozone within the Single Euro Payments Area (SEPA); Canada; Hong Kong; Singapore; Australia; New Zealand; and Israel – check our website for a full list.