What's happening to NS&I?

ClayMSE

Savings in NS&I provide a form of borrowing for the government. In the last few years, the target for this sum has hovered around £10bn-£11bn. Buried in the detail of today's budget was an announcement that next year the "net financing" from NS&I will fall sharply to £6bn. That's a huge slide and with no underlying trend to explain it.

Anyone understand what's going on? Are they trying to wind down NS&I?

Thrugelmir

Suggests a lower retail borrowing requirement. No issue with selling gilts at far lower rates of interest. 

bowlhead99

Savers on here are always moaning about the rates at this bank or that building society or NS&I falling and will never be happy with what they get. 

If the Treasury needs debt finance it can get it from the institutional bond markets at low rates. They do not particularly need to get it from individual savers putting in a few thousand quid at a time, who (thanks to MSE and other sites) would only want to use NSandI anyway if they offered better rates than the ones available from commercial banks. 

So, the government are probably happy to just accept the idea that they don't need to receive quite as much finance through NSandI if it's not the cheapest way to get it, and so will simply let withdrawals/ natural attrition- perhaps due to lower interest rates offered compared to commercial banking groups - reduce the net financing they receive through that route. 

They do still have billions of pounds raised through that method so fears that that are simply going to wind it down would seem somewhat overblown.

If they were properly winding it down you would expect the budget financing from that source to be net negative rather than simply less positive than previous year.

xylophone

Savers on here are always moaning about the rates at this bank or that building society or NS&I falling and will never be happy with what they get. 

Are you surprised?