112% of any FTSE growth with new Guaranteed Equity Bond

• First new GEB in a year – on sale 3 May 2006
• Invest online, by phone or by post
• Can be invested in a SIPP with tax-efficient benefits

And, for the first time, this guaranteed equity bond can be invested in through a SIPP (self-invested personal pension). Provided the total investment in the SIPP does not exceed the lifetime limit in 2011-12, the returns will be free of UK income tax.

112% of FTSE growth

This new GEB offers a gross return equivalent to 112% of any growth in the FTSE 100 index over the five-year term, with no upper limit or cap on the return. The 112% figure means the investment will earn a return equivalent to all of the growth in the FTSE 100 index over the five-year term, plus an extra 12% of FTSE growth on top.

For example, if the FTSE 100 index rose by 20% over the five-year term, £10,000 invested would earn a gross return of £2,240 (customer receives £12,240) at the end of the five years – i.e. 22.4%. If the FTSE rose by 30% over five years, £10,000 would earn £3,360 (customer receives £13,360, i.e. 33.6%).

If the FTSE 100 index falls or fails to rise over the term, investors’ initial investment is returned in full.

Market-leading offer

The 112% share in the FTSE 100 index makes it one of the most competitive guaranteed equity bonds of this type on the market at the moment, and the only one on the market with a sovereign guarantee.

‘A great opportunity’

Trevor Bayley, National Savings and Investments chief executive, said:

“This new Guaranteed Equity Bond, and our first for a year, is a great opportunity for any investor looking for a cash deposit where the returns are linked to the performance of the FTSE but will also beat that performance by a further 12%, as long as the FTSE rises over the five years.

“On top of that, all capital is guaranteed to be 100% secure, even if the FTSE falls, and you can invest from the comfort of your own home, either online or by phone. It couldn’t be simpler.”

NS&I GEB offer period

Issue 11 of the GEB goes on sale for a limited period of eight weeks from 3 May to 27 June 2006. It may close earlier if fully subscribed, so investors are encouraged to buy early, particularly because their investment will earn interest at 4.00% p.a. gross during the eight week offer period, paid when the Bond matures. The minimum investment level for this GEB remains at £1,000 and while the maximum investment is £1 million per person or £2 million for a joint investment.

How to buy NS&I’s Guaranteed Equity Bond

Investors can apply online at www.nsandi.com, by phone with a debit card on 0500 500 000 or by post using an application form which can be requested by phone or downloaded from NS&I’s website at www.nsandi.com. Application forms for the NS&I Guaranteed Equity Bond will not be available at the Post Office.

High demand

Demand has been high for NS&I’s previous issues – the first 10 sold over £1 billion since issue one was launched in March 2002 – and more than 55,000 people have asked to be given advance information about Issue 11. A further 17,000 people registered using NS&I’s online service, launched in January 2005.

NS&I Guaranteed Equity Bond key features

• A five-year investment Minimum investment of £1,000, maximum of £1 million (£2 million for joint investments), maximum online investment £99,999 per person
• A gross return linked to any growth in the FTSE 100 index over the term
• A competitive 112% participation rate
• No cap, giving unlimited growth potential
• 100% guarantee that all of a customer’s original capital investment will be returned at the end of the five-year term, regardless of the performance of the index, backed by HM Treasury
• On sale for a limited period from 3 May to 27 June 2006, may close earlier if fully subscribed
• Any returns from a GEB not held within a SIPP will be subject to income tax in 2011-12 so must be declared to the Inland Revenue Investors do not receive dividends from this guaranteed equity bond.

Notes to Editors

1. NS&I’s previous GEBs offered the following capped rates of return: GEB 1: 65%, GEB 2: 70%, GEB 3: 65%, GEB 4: 60%, GEB 5: 65%. GEB 6: 95% participation rate, GEB 7: 110% participation. GEB 8: 75% participation or 15% guaranteed minimum return. GEB 9: 105% participation, GEB 10:125%.
2. NS&I has GEB customer case studies available on request
3. In summary, the NS&I Guaranteed Equity Bond Issue 11 offers:
   - 4.00% p.a. gross interest during the offer period (paid at maturity)
   - All returns paid gross at maturity, liable to income tax at the rates applicable to savings
   - No fees or charges
   - The start and end FTSE 100 index levels allow for five days initial averaging and six months final daily averaging
   - A launch date of 3 May, with an offer period that closes on 27 June 2006 (earlier if fully subscribed). Investment term starts on 12 July 2006 and the Bond matures on 11 July 2011.
4. A SIPP is a flexible pension managed by the individual. They were announced in Nigel Lawson’s 1989 Budget. Now, over 120,000 people have invested more than £25bn into SIPPs. From 6 April 2006 individuals can invest up to £215,000 taxefficiently a year as long as they do not exceed the lifetime limit (£1.5m in 2006/07).
5. Why have investors purchased NS&I Guaranteed Equity Bonds?
   NS&I has become an established provider of these investments. Recent customer research has found that the main reasons people invest in the NS&I Guaranteed Equity Bond have stayed consistent since the first Issue in March 2002:
   - Customers are guaranteed to get back all of the money invested even if the market falls as it is 100% secure – backed by HM Treasury
   - The NS&I GEB is a low risk way to benefit from potential stock market growth
   - Potentially higher returns than a deposit-based savings account.
6. National Savings and Investments is one of the largest savings organisations in the UK which offers a range of savings and investments products. It has around 26 million customers and £72 billion invested. All products offer 100% security, because they are backed by HM Treasury