NS&I PROVISIONAL Q3 2019-20 RESULTS AND 2020-21 NET FINANCING TARGET

• Q3 2019-20 Net Financing of £3.2 billion
• 2019-20 Net Financing full year forecast: £10.1 billion, in line with the target of £11 billion (within a range of £8 billion to £14 billion)
• 2020-21 Net Financing target: £6 billion (within a range of £3 billion to £9 billion).

NS&I has today published its unaudited quarterly results for the third quarter (October to December 2019) of the financial year 2019-20. NS&I delivered £3.2 billion of Net Financing in Q3 2019-20, giving a year-to-date total of £8.1 billion.

Today’s Budget confirms that NS&I’s Net Financing forecast for 2019-20 is £10.1 billion. This is in line with its Net Financing target of £11 billion (within a range of £8 billion to £14 billion) set out in the Spring Statement on 13 March 2019.

NS&I’s latest quarterly Value Indicator figure is -£248 million, giving a year-to-date total of -£596 million. The Value Indicator compares the relative cost-effectiveness of raising money via NS&I with doing so via the gilt markets. The current low gilt yield environment is exceptional – meaning that the Value Indicator is currently below target. In recognition of this, last month NS&I announced it would be reducing interest rates on some of its variable and fixed term products with effect from 1 May 2020. These changes will re-balance the interests of NS&I’s savers with taxpayers, and help to maintain the stability of the broader financial services sector.

2020-21

In the 2020 Budget, it has also been confirmed that NS&I will have a 2020-21 Net Financing target of £6 billion, within a range of £3 billion to £9 billion.

Provisional Q3 2019-20 results (1 October – 31 December 2019)

All figures are in £ billion and are subject to rounding. Q3 2019-20 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 release these unaudited figures and publishes the 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. Value Indicator – an indication of NS&I’s cost-effectiveness in raising finance for the Government. In general, 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 gilts. Some adjustments and assumptions are made to the calculation, including in identifying and applying an equivalent gilt, in response to specific NS&I product features. Index-linked Savings Certificates are included in the calculation of the Value Indicator and use the same approach as for other products, with one exception to the formula. As the real yield gilt comparators for RPI linked products are currently negative, NS&I applies a floor to the comparative yield set at zero, which means the calculation does not fully reflect the Value Indicator profile of this product. The Value Indicator methodology is agreed with HM Treasury and is reviewed and revised periodically, with its agreement, to support a long-term approach to product strategy.

4. For further information, please contact the NS&I media team.