National Savings and Investments raised a record £23.8billion in the last financial year as customers poured money into its savings products in the wake of the pandemic.
In its annual report published today, the Treasury-backed bank and issuer of Premium Bonds reported its highest level of net financing in its history – a figure which accounts for money going in, and cash withdrawn.
However, it fell well short of its heavily revised target. It upped the 2020-21 goal from £6billion to a monster £30billion and £40billion as savers turned to it in their droves.
At the time, it said the move had been made to ‘reflect government finance requirements arising from Covid-19’.
Pandemic savings: Many turned to NS&I as a safe place to save cash during the pandemic
While it may have raked in more cash during the pandemic, NS&I saw £64.6billion in gross outflows, more than double the previous year.
It came after the Government back slashed its rates on some of its products to as little as 0.01 per cent in November and suffered customer service problems that angered some.
The Government bank was unable to handle the flood of calls from worried savers. Two in five customers gave up trying to get through on the phone to the government bank, and those who persevered waited up to 40 minutes to get through.
‘In a hugely challenging year, I regret the impact of operational issues on our customers, and apologise that they did not receive the levels of service that they have come to expect from NS&I,’ chief executive Ian Ackerley said.
‘We are in a better position now, despite the ongoing pandemic, but there is more to do in the months ahead.’
The meltdown prompted NS&I to delay the date for phasing out cheques for Premium Bond prizes.
But today it said it had reversed the plans completely, instead allowing customers who receive cheques to continue doing so.
‘We have responded to feedback from some of our customers and we have decided to retain the option for them to receive Premium Bonds prizes through the post,’ Ackerley said.
‘We will continue to encourage customers to have their prizes paid directly into their bank account, as many have done so in the last 12 months.’
The Treasury-backed NS&I saw a record level of cash this year but it still fell short of its £35bn target
Elsewhere, the Government bank confirmed it will start to roll out green bonds for everyday investors over 2021 and 2022 on behalf of the Government.
Ahead of the March budget, the Treasury announced the launch of the world’s first sovereign green savings bond for retail investors through NS&I.
There has been growing interest in the area of green investment with the Government adopting climate change targets, including the transition to a net-zero economy by 2050.
‘I am proud that NS&I has been chosen to deliver a green retail savings product on behalf of the Government. 2021-22 will be an exciting year as we embark upon our green savings launch and also accelerate our long-term programme to transform NS&I so that we remain fit for the future.’
The figures show that £86.2billion went into NS&I products in 2020-21, and £64.6billion went out – it now holds a total £203billion of savers money.
This is almost double the amount in 2014-15, where £123.9billion was held at NS&I.
