Finance Bill 2003 - implications for NS&I
The legislation will provide NS&I, the government-backed savings and investments provider, with the flexibility to modernise and rationalise its savings accounts to meet changing customer needs.
In an increasingly demanding financial market place, the new freedoms will give NS&I greater scope in developing new accounts. NS&I will be able to choose to issue cards to customers so that they can, for example, make cash withdrawals from ATM machines; and offer different types of return, such as those linked to indices, in addition to straightforward interest. These features are common in the savings and investments marketplace and NS&I will be able to offer them as their customers demand. NS&I will also have the ability to close outdated or superseded types of accounts.
The new freedoms will also mean that future account products will be able to be offered to customers under written terms and conditions - similar to the way in which NS&I's bond or certificate products, and other financial products in the market, are offered - rather than under statutory regulations. This will increase flexibility and make it easier for customers to understand fully how their accounts work, in line with NS&I's value of straightforwardness.
No imminent changes to the range of accounts offered by NS&I are planned and NS&I would not make any changes without having something else to offer its customers. Any changes made in the future will be explained to customers - in keeping with NS&I's commitment under the Banking Code - and to the media at the appropriate time as and when full details become available.
Alan Cook, National Savings and Investments Chief Executive, said:
"The proposed changes in the Finance Bill would provide greater flexibility for National Savings and Investments to focus on customers' needs and introduce new savings accounts as and when needed.
"Modernising our customer offer is essential if we are to continue to compete successfully in the savings and investments market and fulfil our role of providing cost-effective financing for government.
"We continually review our products and the services we offer to customers to ensure we continue to meet their needs."
The role of National Savings and Investments is to provide cost-effective financing to the Treasury by reducing the cost to the taxpayer of government borrowing whilst offering good value to customers. It operates in the same markets as major banks and building societies in the retail financial services sector. Currently, there is £62 billion invested in National Savings and Investments by 30 million customers.
Notes to Editors
- National Savings and Investments is an Executive Agency of the Chancellor of the Exchequer.
- National Savings and Investments' values are security, straightforwardness and integrity, delivered with a human touch.