The Net Financing delivered in the first quarter is in line with expectations and reflects strong sales of 65+ Bonds and the smooth closure of the product on 15 May. Premium Bond sales have also contributed to Net Financing after the investment limit was raised from £40,000 to £50,000 on 1 June.
The Value Indicator savings of £22 million have been delivered at a time of continuing volatility in the gilt markets. Given the fluctuation of gilt yields, against which NS&I measures its cost-effectiveness in raising finance for the Government, the Value Indicator target for 2015-16 is again to deliver positive value, but with a lower limit of -£100 million (excluding 65+ Bonds).
The 2015 Budget confirmed that NS&I’s 2015-16 Net Financing target is to deliver £10 billion, in a range of £2 billion either side of this.
Jane Platt, Chief Executive, NS&I, said: “These results are in line with our expectations: underlining the success of 65+ Bonds and the smooth closure of the product; and for the profile of Net Financing at this stage in the financial year.”
Provisional Q1 2015-16 results:
|Quarter||Gross inflows||C&AIP*||Gross outflows||Net Financing||Total stock||Value indicator|
All figures are in £ billion and are subject to rounding. Q1 2015-16 figures are provisional, unaudited and subject to change due to transaction processing (evidence of identity) adjustments, cancellation and any accounting adjustments.
*Capitalised and accrued interest and prizes earned.
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
- 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 is 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 which 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.
- 65+ Bonds are a specific measure distinct from NS&I’s normal activities and therefore NS&I’s Value Indicator target for 2015-16 excludes the cost of this product. The costs are shown in ‘Budget 2014: policy costings’ on the HM Treasury website and have been certified by the Office for Budget Responsibility (OBR).
- For further information, please contact the NS&I media team.