National Savings & Investments (NS&I) has seen record savings inflows in its 2007/08 financial year.
The state owned investments and savings provider says it has benefited from a ‘flight to safety’ amid the economic turmoil caused by the credit crunch.
NS&I’s latest results show £13.8bn in net sales during 2007/08, giving a net financing contribution to Government funds of £5.9bn, more than double NS&I’s target of £2.8bn.
Sales through Post Office branches have continued to perform well, accounting for 56% of all sales, while the direct channel has shown strong growth, accounting for around 39% of sales, or £5.4bn.
In the first quarter of the 2008/09 financial year, gross inflows have reached around £4bn, while net financing to the Government was £1.1bn.
Jane Platt, chief executive of NS&I, says the fallout of the credit crunch and fears over bank defaults have prompted a ‘flight to safety’ among consumers, with a preference for NS&I’s 100% guaranteed products.
Platt says NS&I has also made good progress in adding value for UK taxpayers, the process by which it saves the Government money by providing cheaper debt than it could access elsewhere.
A total of £375m of added value was made, £100m above target, and Platt adds: “Our new five-year strategy, ‘NS&I adding value’, has been launched successfully and we’ve made significant progress in simplifying, modernising and diversifying the business in a sustainable way.”
However, Platt says the effects of the flight to safety are beginning to subside, and net sales are expected to fall in the coming year as banks increasingly offer high savings rates to help bolster their own balance sheets.
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