NS&I provisional Q3 2013-14 financial results and 2014-15 Net Financing target
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Latest 2013-14 Net Financing forecast: £3.4 billion - Budget 2014 announces plans to help savers
NS&I today published its provisional Q3 (October-December 2013) results for the financial year 2013-14. Net Financing for the quarter was £0.4 billion, bringing the year-to-date total to £2.9 billion. NS&I’s target for 2013-14 is to deliver Net Financing of £2 billion (in a range of £2 billion either side of this, from £0 to £4 billion). NS&I is on target to deliver this with forecasted Net Financing of £3.4 billion.
NS&I’s original Net Financing target for 2013-14 was £0 (in a range of £2 billion either side of this, from -£2 billion to £2 billion). In the Autumn Statement (5 December 2013) the target was revised to £2 billion. This was done to reflect changes in the savings market and to help to ensure NS&I can continue to balance offering fair rates to its savers alongside delivering cost-effective finance to government and supporting the stability of the broader financial services sector. In Q3, there was only a marginal difference between gross inflows (new sales) and gross outflows (money withdrawn by savers) and so NS&I’s latest Net Financing forecast for 2013-14, published in today’s Budget, remains at £3.4 billion.
NS&I is forecast to deliver around £350 million of savings to the taxpayer in 2013-14 as measured by the Value Indicator. NS&I’s Q3 2013-14 Value Indicator figure, published today, is £150 million, bringing the year-to-date total to £190 million.
Budget 2014 announces plans to help savers (2014-15)
The Chancellor has also announced in today’s Budget plans for NS&I to help support savers by:
- Launching a special issue of a market-leading savings bond for people aged over 65 which will go on sale during the final quarter of the current financial year (January 2015) with the indicative interest rates announced as 2.80%/AER (1 year) and 4.0%/AER (3 year). A maximum of £10,000 can be saved in each bond. The limits and the exact rate of the bond will be set in the Autumn Statement.
- Lifting the investment limit of Premium Bonds from £30,000 to £40,000 from 1 June 2014 and then further increasing that from £40,000 to £50,000 in 2015-16
- Increasing the number of monthly £1 million Premium Bonds prizes from one to two per month, with effect from the August 2014 prize draw
- To enable NS&I to deliver this, its 2014-15 Net Financing target will be £13 billion (in a range of £2 billion either side of this, from £11 billion to £15 billion).
NS&I’s Value Indicator target for 2014-15 will be to produce positive value. The special issue savings bond for older savers is a specific Budget measure distinct from NS&I’s normal activities. The increased cost of raising finance through this product over gilts will be given as part of the Autumn Statement 2014 and therefore NS&I’s Value Indicator target for 2014-15 excludes the cost of this product.
Jane Platt, Chief Executive, NS&I, said:
“I welcome the plans the Chancellor has announced today in order to help support savers.
“The launch of a market leading savings bond for people aged 65 plus will help support those who rely on their savings income in retirement. In addition to this, Premium Bonds are unique and hugely popular with our customers, so increasing the number of £1 million prizes per month to two, will add to the excitement that our savers might win a big prize in the monthly prize draw and, increasing the limit on the amount that can be invested in Premium Bonds is something that hasn’t been done for over a decade.”
Quarterly figures
| Quarter/year | Gross inflows | C&AIP* | Gross outflows | Net Financing | Total stock | Value Indicator |
|---|---|---|---|---|---|---|
| Q3 2013-14 (unaudited) | 3.5 | 0.5 | 3.6 | 0.4 | 105.1 | 0.15 |
| Q2 2013-14 (unaudited) | 4.1 | 0.4 | 3.8 | 0.7 | 104.7 | 0.09 |
| Q1 2013-14 (unaudited) | 4.9 | 0.7 | 3.8 | 1.8 | 104.0 | -0.05 |
| 2012-13 | 11.7 | 2.3 | 14.7 | -0.7 | 102.2 | -0.2 |
| 2011-12 | 18.3 | 2.4 | 16.7 | 4.0 | 102.9 | 0.42 |
| 2010-11 | 15.3 | 2.6 | 17.8 | 0.1 | 98.9 | 0.8 |
| 2009-10 | 18.1 | 1.9 | 18.4 | 1.6 | 98.8 | 1.4 |
*C&AIP is capitalised and accrued interest and prizes earned.
All figures are in £ billion (rounded). 2013-14 figures are unaudited and subject to change due to late transaction processing (evidence of identity), cancellation and any accounting adjustments.
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 – 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 – a measure 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.