Savings giant NS&I bust through its target for net financing to the Government in 2022/23 after uncertainty in the United States banking sector led to it unexpectedly receiving a flurry of high-value deposits.
Products offered by NS&I have 100% capital security, because the provider is backed by the Treasury.
NS&I delivered £10 billion-worth of net financing to the Government in 2022/23.
But its target had been set at £6 billion with a margin of £3 billion, meaning it could have been on target if it had raised £3 billion to £9 billion.
It said: “At the very end of the financial year, following uncertainty in the US banking sector, NS&I unexpectedly received a number of high-value deposits which took it over the upper end of the target range.
We faced some challenges at points through the year, but we are also looking to the future as we make progress on our transformation programme, which will ensure we continue to deliver for our customers and the nation for many years to come, helping us to become the most trusted savings provider in the UK— Dax Harkins, NS&I
“In the opening months of 2023-24, NS&I saw deposits return to more normal levels.”
The savings giant has more than 24 million customers. When customers invest in NS&I products, they are lending to the Government. In return, the Government pays interest or prizes for Premium Bonds.
NS&I also has a has a duty to balance the interests of savers, taxpayers and the broader financial services sector.
The annual report for 2022/23 also showed NS&I missed its customer satisfaction target for the year, recording 74.56% against a target of 84%.
In July 2022, an additional layer of security was added to transactions. While large numbers of customers are using the new system without issue, a relatively small number experienced problems, which had a negative impact on customer satisfaction levels, NS&I said. It said it has taken action to improve performance in the coming year.
NS&I also missed service delivery measures for gender balance and employee engagement but did meet its service delivery measures relating to operational delivery, Government payment services delivery performance, digital-first, efficient administration of funds, fraud management, the Financial Ombudsman Service (FOS) and ethnic diversity.
NS&I chief executive, Dax Harkins said: “2022/23 was a year in which we delivered both for government and for savers. We made a significant contribution to the Government’s debt financing requirements, helping to pay for the essential public services on which we all rely.
“Throughout the year, we supported savers by increasing interest rates across all of our variable products, with the Premium Bonds prize fund rate increasing five times, meaning it has more than tripled. And thanks to the most recent increase earlier this month, the prize fund rate is now at a 15-year high.
“We faced some challenges at points through the year, but we are also looking to the future as we make progress on our transformation programme, which will ensure we continue to deliver for our customers and the nation for many years to come, helping us to become the most trusted savings provider in the UK.”
