NS&I increases interest rates and issues provisional Q1 2018-19 results

NS&I today announced that it is increasing interest rates across the following variable rate products from 1 October 2018.

NS&I today announced that it is increasing interest rates across the following variable rate products from 1 October 2018.

Product Current rate New rate (from 1 October 2018) Interest rate increase
Income Bonds 1.00% gross/AER 1.15%gross/1.16%AER 15 basis points
Investment Account 0.70% gross/AER 0.80% gross/AER 10 basis points
Direct Saver 0.95% gross/AER 1.00% gross/AER 5 basis points

Find out more about these interest rates changes and other NS&I products

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Ian Ackerley, Chief Executive, NS&I, said:

“We are pleased to be able to increase the interest rates on our three savings account products.

“NS&I’s operating framework means we have a duty to balance the interests of our savers, the taxpayer and broader market stability, when setting our interest rates.”

Since the Bank of England base rate changes in November 2017 and August 2018, NS&I will have increased the interest rate on Income Bonds by 40 basis points, Investment Account by 35 basis points and on Direct Saver by 30 basis points.

Provisional Q1 2018-19 results

NS&I, also today, published its latest unaudited quarterly figures, for the first quarter of the financial year 2018-19 (April-June 2018).

In Q1 2018-19, NS&I delivered £3.1 billion of Net Financing. NS&I also delivered £36 million of value to the taxpayer in Q1 2018-19.

The March 2018 Spring Statement confirmed that NS&I’s 2018-19 Net Financing target is to deliver £6 billion, within a range of £3 billion to £9 billion.

NS&I’s Value Indicator target for 2018-19 is to deliver £125 million of value, but with a lower limit of £0 (zero), (excluding Investment Guaranteed Growth Bonds). 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 volatile gilt yields.

Unaudited Q1 2018-19 results (1 April – 30 June 2018)

Quarter Gross inflows (including reinvestments)£bn C&AIP* £bn Gross outflows £bn Net Financing £bn Total stock £bn Value Indicator £bn
Q1 2018-19 11.0 0.7 8.6 3.1 159.8 0.04**
Q1 2017-18 7.4 0.7 6.5 1.6 148.5 0.03**

All figures are in £ billion and are subject to rounding. Q1 2018-19 figures are provisional, unaudited and subject to change due to transaction processing (evidence of identity) adjustments, cancellation and any accounting adjustments.

*C&AIP is capitalised and accrued interest and prizes earned. All figures are in £ billion and subject to rounding.

**Excluding 65+ Bonds and Investment Guaranteed Growth Bonds.

NS&I reports quarterly on gross inflows and outflows, Net Financing and total stock. Each quarter, NS&I issues these unaudited figures and publishes its Annual Report and audited accounts each financial year.

Notes to Editors

  1. NS&I is one of the largest savings organisations in the UK, offering a range of savings and investments to 25 million customers. All products offer 100% capital security, because NS&I is backed by HM Treasury.
  2. 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 Bonds prize draw payments. A positive Net Financing figure represents a positive contribution to government financing.
  3. AER stands for Annual Equivalent Rate and enables the comparison of interest rates from different financial institutions and across different products on a like-for-like basis. It shows what the notional annual rate would be if interest was compounded each time it was credited or paid out. Where interest is credited once a year the rate quoted and the AER will be the same.
  4. Gross is the taxable rate of interest without the deduction of UK Income Tax.
  5. Value Indicator – an indication of NS&I’s cost-effectiveness in raising finance for the Government. It is an indication of the total cost of delivering Net Financing and servicing existing customers’ deposits compared with how much it would cost the Government to raise funds through the wholesale market via equivalent maturity gilts. 65+ Bonds are not included in the Value Indicator. As they were a specific Budget measure, the cost for delivering them was set out in the 2014 and 2015 Budget scorecards. Investment Guaranteed Growth Bonds are a specific measure announced at the 2016 Autumn Statement and are not included in the Value Indicator.
  6. For further information, please contact the NS&I media team.