Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment his Department has made of the potential merits of enabling National Savings and Investments to reverse the recent reductions to its savings rates.

NS&I must balance the interests of savers, taxpayers and the broader financial services sector.

After 6 months of offering often market-leading rates, NS&I has announced interest rate reductions that will realign it with the rest of the retail savings market.

NS&I’s Net Financing target for 2020-21 was revised from £6 billion to £35 billion to reflect the Government’s funding requirements during the Covid-19 pandemic. NS&I raised £14.5 billion in Net Financing from April to June. Demand for NS&I products has remained at similarly high levels since then, making rate reductions necessary.

With gilt yields currently at very low levels, government financing raised through NS&I is much more expensive that that raised through gilt issuance. It is important that HM Treasury takes into account taxpayer value considerations when making financing decisions.