New Guaranteed Equity Bond from NS&I

• New GEB - Issue 14 on sale 12 March- 29 April 2008 (or earlier if fully subscribed)
• Invest online, by phone or by post
• Can be invested in a SIPP with tax-efficient benefits

This will offer a gross return that matches FTSE 100 Index growth, up to a maximum return of 70%, over the five year term of the Bond, without any risk to investors’ capital.

For example, if the FTSE rose by 20% over the five-year term, £10,000 invested would earn a gross return of £2,000 (customer receives £12,000 in total) at the end of the five years. If the FTSE rose by 120% over the five years, £10,000 invested would earn a gross return of £7,000 (customer receives £17,000 in total) as a return of up to 70% of FTSE index growth is offered on NS&I’s Issue 14 of the Guaranteed Equity Bond.

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

While NS&I Guaranteed Equity Bonds are linked to the FTSE, NS&I does not invest the money in equities, so investments in the Guaranteed Equity Bond will not be eligible for dividends. Therefore investors may not get as high a return as they might through investing directly in the stock market. However, unlike investments in the stock market, any money invested is 100% secure.

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 14 coincides with the maturity of NS&I’s fourth issue of the five year Guaranteed Equity Bond on 9 April 2008. This fourth issue went on sale in March 2003, with a maximum return of 60% gross over five years and a FTSE start level of 3847.8. NS&I will be writing to investors this month to remind them of the maturity of their investment and the launch of the new Guaranteed Equity Bond.

NS&I GEB offer period

Issue 14 of the GEB goes on sale for a limited period from 12 March to 29 April 2008. It may close earlier if fully subscribed so investors are encouraged to invest early, particularly because their investment will earn interest at 4.75% p.a. gross until the Bond’s investment term starts on 14 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 No fees or charges For all channels there is a minimum investment of £1,000 and a maximum of £1 million (£2 million for joint investments), maximum online investment of £99,999 per person per transaction
• A gross return that matches FTSE growth, up to a maximum of 70%, over the term of the investment
• The start and end FTSE 100 index levels allow for initial five days averaging and final six months daily averaging
• 100% guarantee that customer’s original investment will be returned at the end of the five-year term, regardless of the performance of the FTSE 100 index, backed by HM Treasury
• All returns paid gross at maturity
• 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 HM Revenue and Customs
• Investors do not receive dividends from this Guaranteed Equity Bond
• No access to the funds invested once the term has started except upon 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 case studies of customers who have previously invested in NS&I’s Guaranteed Equity Bonds available on request
2. Inflation may reduce the true value of the original capital over time.
3. Past performance is not an indicator of future performance
4. A SIPP is a flexible pension managed by the individual. From 6 April 2007 individuals can invest up to £225,000 tax-efficiently a year as long as they do not exceed the lifetime limit (£1.6m in 2007/08).
5. NS&I 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 £84 billion invested. All products offer 100% security, because they are backed by HM Treasury.