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NS&I Provisional Q3 2020-21 Results

  • Q3 2020-21 Net Financing of -£9.5 billion (minus £9.5 billion)
  • At 31 December 2020, Net Financing total of £28.8 billion, against a whole-year target of £35 billion, in a range of £30 billion to £40 billion

NS&I today published its unaudited quarterly results for the third quarter (October-December 2020) of the financial year 2020-21. Net Financing for the quarter was -£9.5 billion, giving a year-to-date total of £28.8 billion.

2020-21 has been an unprecedented year, reflected in NS&I’s Net Financing target being revised significantly upwards in July 2020 from £6 billion (+/- £3 billion) to £35 billion (+/- £5 billion). The interest rate reductions made by NS&I towards the end of 2020 are helping NS&I to deliver better value for the taxpayer by improving the cost-effectiveness of the financing that it raises for the Government, in line with its operating framework to balance the interests of savers, taxpayers and the broader financial services sector; and have seen NS&I return to a more normal position for its products against the interest rates offered by the banks and building societies. This helped NS&I reduce financing inflows from the extraordinary levels it was experiencing.

With uncertainty and volatility in the savings market, NS&I has experienced both upside and downside pressures on Net Financing, and it is now expected to deliver a lower level of Net Financing than that reported today.

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

“NS&I is determined to restore normal levels of customer service following the operational challenges we have faced. Due to changed government funding requirements, in the first six months of 2020-21, NS&I raised more Net Financing than in the whole of the previous three years, despite reduced staffing levels due to the impact of the Covid-19 pandemic.”

NS&I’s Value Indicator target was suspended from 1 April 2020 until 30 September 2020 to reflect ongoing exceptional market conditions. The suspension of the Value Indicator target was extended until January 2021 and has been further extended to 31 March 2021.

Unaudited Q1, Q2 and Q3 2020-21 results (1 April – 31 December 2020)

Qtr / year

Gross inflows (including reinvestments)

£bn

 

C&AIP*

£bn

 

Gross outflows

£bn

 

Net Financing

£bn

 

Total stock

£bn

 

Value Indicator

£bn

 

Q3 2020-21

(unaudited)

16.5

0.5

26.5

-9.5

208.0

N/A

Q2 2020-21

(unaudited)

33.0

0.7

10.0

23.8

217.5

N/A

Q1 2020-21

(unaudited)

19.9

0.6

6.0

14.5

193.7

 

N/A

Total

(unaudited)

69.4

1.9

42.5

28.8

208.0

N/A


NS&I financial results 2015-16 to 2019-20

Year

Gross inflows (including reinvestments)

£bn

 

C&AIP*

£bn

 

Gross outflows

£bn

 

Net Financing

£bn

 

Total stock

£bn

 

Value Indicator

£bn

 

2019-20

38.2

2.6

29.2

11.6

179.2

-0.9****

2018-19

37.3

2.4

28.9

10.8

167.6

0.01***

2017-18

42.7

2.5

35.4

9.8

156.7

0.2***

2016-17

35.0

2.3

25.5

11.8

146.9

0.1**

2015-16

31.5

2.1

22.3

11.3

135.1

0.1**


All figures are in £ billion and are subject to rounding. Q1, Q2 and Q3 2020-21 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.

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

****Excluding 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.
  1. 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.
  1. 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. This measure is currently suspended until 31 March 2021.
  1. For further information, please contact the NS&I media team.

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