120% of any FTSE growth with new Guaranteed Equity Bond from NS&I

This will offer a return equal to 120% of any growth in the FTSE 100 index over the five-year term of the Bond, without any risk to investors’ capital.

120% of FTSE growth

With no upper limit or cap on the return of the FTSE and the 120% 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 20% 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 £2,400 (customer receives £12,400) at the end of the five years, a 24% return. If the FTSE rose by 30% over five years, £10,000 would earn £3,600 (customer receives £13,600, a 36% return).

If the FTSE 100 index falls or fails to rise over the term, investors’ initial investment is returned in full as NS&I is fully backed by HMT.

‘A great opportunity’

Peter Cornish, NS&I’s marketing director, said:

"This new Guaranteed Equity Bond is a great opportunity for any investor who wants to try and outperform the FTSE, without risking their capital. The returns on the Guaranteed Equity Bond are linked to the performance of the FTSE, but will also exceed that performance by a further 20% of FTSE growth, as long as the FTSE rises over the five years.

"Investors can feel safe in the knowledge that all capital is completely 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."

Investors can now invest in the Guaranteed Equity Bond (GEB) through a SIPP (self-invested personal pension). Provided the total investment in the SIPP does not exceed the lifetime limit the returns will be free of UK income tax. Investors should contact their SIPP provider for further details.

The launch of GEB 12 coincides with the maturity of National Savings and Investments’ first issue of the five year Guaranteed Equity Bond on 16 April 2007. This first issue went on sale in March 2002, with a maximum return of 65% gross over five years and a strike rate of 5220.7. National Savings and Investments will be writing to investors this month to inform them of the maturity of their investment on 18 April 2007 and the launch of the new Guaranteed Equity Bond.

NS&I GEB offer period

Issue 12 of the GEB goes on sale for a limited period of six weeks from 14 March to 24 April 2007. It may close earlier if fully subscribed so investors are encouraged to buy early, particularly because their investment will earn interest at 4.75% p.a. gross until the Bond’s investment term starts on 9 May. This interest will be paid when the Bond matures.

The minimum investment level for this GEB remains at £1,000 and the maximum investment is £1 million per person or £2 million for a joint investment.

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 120% participation rate The start and end FTSE 100 index levels allow for five days initial averaging and six months final daily averaging
• 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
• Any returns from a GEB not held within a SIPP will be subject to income tax in 2012-13 so must be declared to the Inland Revenue Investors do not receive dividends from this Guaranteed Equity Bond. No access to the funds invested once the term has started except in death.

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.

Notes to Editors

1. NS&I has GEB customer case studies available on request
2. Inflation may reduce the true value of investment over time.
3. Past performance is not an indicator of future performance 4. In summary, the NS&I Guaranteed Equity Bond Issue 12 offers: 4.75% p.a. gross interest until investment term starts on 9 May (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 14 March, with an offer period that closes on 24 April 2007 (earlier if fully subscribed). Investment term starts on 9 May 2007 and the Bond matures on 9 May 2012.
4. A SIPP is a flexible pension managed by the individual. From 6 April 2006 individuals can invest up to £215,000 tax-efficiently 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. 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 27 million customers and £78 billion invested. All products offer 100% security, because they are backed by HM Treasury. 7. Further information and digital images are available from the NS&I Media Team 8. Subscribe to the NS&I RSS newsfeed. Simply copy and paste this link www.nsandi.com/mediacentre.xml into your RSS reader to receive regular news alerts from NS&I. *This number is for sales only (UK call centre). Free phone number from a BT landline; charges from other providers may vary. For security calls may be recorded.