NS&I 2012-13 Annual Results (for year ending 31 March 2013) and un-audited Q1 2013-14 results
NS&I today announced its annual results for the year to 31 March 2013. Key points include:
- NS&I delivered -£666 million of Net Financing – meeting its revised Net Financing target of -£1 billion in a range of £2 billion either side of this. NS&I’s original Net Financing target for 2012-13 was £0 (in a range of £2 billion either side of this). In December 2012, 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 -£1 billion (in a range of £2 billion either side of this, from -£3 billion to £1 billion).
- NS&I remains at the heart of the Government’s debt management programme: over the last four years, NS&I has delivered £5 billion of Net Financing.
- In 2012-13 NS&I’s Value Indicator figure (which gives an indication of NS&I’s cost-effectiveness in raising finance for the government in comparison to it raising funds through the wholesale markets) was -£249 million. NS&I’s original Value Indicator target for 2012-13 was to deliver positive value. However, gilt yields were close to historically low levels for much of 2012-13 – well below the assumed levels on which NS&I’s Value Indicator target for the year was based. If NS&I were to have delivered a positive Value Indicator figure in 2012-13, then it would have had to reduce its interest rates to levels that were unfair to its savers. In recognition of this, in the Autumn Statement although NS&I’s overall 2012-13 Value Indicator target remained positive, a new lower limit of -£320 million was set. Over the last four years NS&I has saved the taxpayer £2.3 billion in net debt interest payments, measured by the Value Indicator.
- NS&I’s efficiency ratio – a measure of the cost of administering money invested with NS&I – was 16 basis points in 2012-13 (2011-12: 17 basis points). This compares favourably to NS&I’s competitors in the private sector.
- NS&I completed the re-tender of its operational services contract. This was awarded to Atos IT Services who will deliver customer-facing and back office services to NS&I’s 25 million customers. NS&I’s current contract is estimated on a ‘like-for-like’ basis, stripping out the impact of growth and inflation, to have reduced NS&I’s core operating costs by some 55% – equating to some £530 million in cost savings since it began in 1999. Over the course of the next seven years the new contract will save taxpayers more than £400 million 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.
- NS&I has maintained its high customer satisfaction scores in 2012-13: 88%(1) of customers gave NS&I a positive rating in response to the question ‘Taking everything into account, how would you rate NS&I’s customer service?’ against a target of at least 87%; customer timeliness was 99.2% against a target of at least 97%; and customer service accuracy was 99.4% against a target of at least 98.5%.
NS&I continued to invest in its direct channels in 2012-13: as a consequence of these enhancements and communication of the new services, 64% of transactions (by value) were made by phone, post, BACS or at nsandi.com.
Jane Platt, Chief Executive, NS&I, said:
“In a very unpredictable market environment we have behaved responsibly and met all our financial and customer service targets.
“At the same time we have transformed our business and entered the final stages of our modernisation programme, offering enhanced online and phone services to more of our customers. Our new operational services contract will deliver our vision of enhancing further the services we offer to savers over the next seven years, while taxpayers across the country will also benefit as the contract will deliver a saving of over £400 million by 2021.”
2012-13 annual results
| Year | Gross inflows | C&AIP* | Gross outflows | Net Financing | Total stock | Value Indicator (VI) / Value Add (VA) |
|---|---|---|---|---|---|---|
| 2012-13 (including Q4) | 11.7 | 2.3 | 14.7 | -0.7 | 102.2 | -0.2 (VI) |
| 2011-12 | 18.3 | 2.4 | 16.7 | 4.0 | 102.9 | 0.4 (VI) |
| 2010-11 | 15.3 | 2.7 | 17.9 | 0.1 | 98.9 | 0.8 (VI) |
| 2009-10 | 18.1 | 1.9 | 184 | 1.6 | 98.8 | 1.4 (VI) |
| 2008-09 | 26.0 | 2.6 | 16.1 | 12.5 | 97.2 | 0.2 (VA to the end of Q3 when the VA target was suspended) |
All figures are in £ billion and subject to rounding. Q1 2013-14 figures are subject to change due to late transaction processing (evidence of identity), cancellation and any accounting adjustments.
*Capitalised and accrued interest and prizes earned.
Un-audited Q1 2013-14 results
NS&I’s 2013-14 Net Financing target is £0, in a range of -£2 billion to £2 billion. Net Financing for the quarter was £1.7 billion, and NS&I’s Value Indicator figure was -£22 million.
NS&I’s Value Indicator target for 2013-14 is again to deliver positive value with a lower limit of -£320 million. The lower limit is important because it allows NS&I to continue to balance the interests of its savers taxpayers and the stability of the broader financial services sector through a period of exceptionally low gilt yields.
| Quarter | Gross inflows | C&AIP* | Gross outflows | Net Financing | Total stock | Value Indicator |
|---|---|---|---|---|---|---|
| Q1 2013-14 | 4.9 | 0.7 | 3.9 | 1.7 | 103.9 | -0.02 |
| Q1 2012-13 | 3.0 | 0.9 | 4.0 | -0.1 | 102.8 | -0.02 |
Notes to Editors
- Research was conducted by Ipsos MORI, an independent research company, amongst 6,175 NS&I customers over the phone. A ‘positive rating’ is defined as a score of 7-10 on a 1 to 10 scale, where 1 means NS&I does not meet your needs at all and 10 means NS&I meets your needs completely.
- NS&I’s Annual Report and Accounts and Product Accounts can be found online.
- On 11 June 2013, NS&I reduced the interest rates on its Income Bonds to 1.25%, its Direct Saver to 1.1% and its Direct ISA to 1.75%, effective from 12 September 2013.
- NS&I is one of the largest savings organisations in the UK, offering a range of savings and investments to over 25 million customers. All products offer 100% capital security, because NS&I is backed by HM Treasury.
- Net Financing – 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.
- Value Indicator – 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.