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Media centre /
Press releaseFIFTH ISSUE LAUNCHED AS NATIONAL SAVINGS AND INVESTMENTS ESTABLISHES ITSELF AS A KEY PROVIDER OF GUARANTEED EQUITY BONDS06 May 2003First four Issues bring in over £300m More than £300 million has been invested by customers in National Savings and Investments' (NS&I) Guaranteed Equity Bonds since they were first launched in 2002. The decision to offer Guaranteed Equity Bonds (GEBs) was a landmark for NS&I because it was the first time it had ever offered an equity-linked investment. NS&I's GEBs give investors the opportunity to share in potential stock market growth with the Treasury guarantee that their capital is 100% secure. Issue 5 is on sale for a limited period from 6 May to 16 June 2003, although it may close earlier if fully subscribed. Due to heavy demand, it is launched just under a month after Issue 4 closed which, on its last day of sale alone, sold £8 million. Currently, over 9,000 people are registered to receive advance information on Issue 5. Issue 5 of the GEB offers investors the opportunity to gain from any growth in the FTSE 100 index over the five year term, up to a maximum of 65% gross, with zero risk to their capital. As well as picking up an application from Post Office Branches or downloading one online at www.nsandi.com, investors can apply (using a debit card) for the Bond twenty four hours a day, seven days a week by calling 0500 500 000. Why investors purchased NS&I Guaranteed Equity Bonds? In just over a year, NS&I has become an established major provider for these investments and customers say the main reasons they invest in the NS&I Guaranteed Equity Bond are:
Some customer comments following investment in previous Issues: "The unusual combination of the lack of risk and the excitement of the potentially good return attracted me to this investment." (Mrs L Stooksbury, Winchester, Age 37) "I chose this investment because the Bond will match the growth in the FTSE 100 index up to a maximum of 65%, and I will not lose any of my capital." (Mr P Teague, Cheltenham, aged 54) "I invested in the Bond because I was looking for a worthwhile and secure investment for my retirement with the chance of a better return than just leaving it in a bank or building society account. I have recommended it to my friends." (Mrs J Loxton from Barnsley, aged 56) Gill Cattanach, Commercial Director, National Savings and Investments, said: "With low interest rates and uncertain stock market conditions, investors are seeking the opportunity to earn a better return over the longer-term without risking a penny. "Our Guaranteed Equity Bonds have proved successful over the last year and are now an established part of our product range. As with all our products, customer's money is 100% secure - backed by the Treasury." ENDS Notes to Editors1. Issue 5 has a maximum potential return or 'cap' of 65% gross (i.e. before tax) so investors will receive all of the growth in the FTSE 100 index over the five year term up to a maximum of 65%. Other types of Guaranteed Equity Bonds on the market offer a 'participation' rate. Reduced participation bonds have no maximum limit on returns but only pay a proportion of the growth in the FTSE 100 index. (Product Comparison chart - Appendix 3) For example, if the FTSE 100 index were to grow by 65%, the NS&I Guaranteed Equity Bond would give a return of 65% gross, (i.e. 100% of 65%) whereas a Bond with a reduced participation of, for example, 70% would only give a return of 45.5% gross (i.e. 70% of 65% - See Appendix 1). For all growth levels in the FTSE 100 index up to 92%, the National Savings and Investments Guaranteed Equity Bond would pay a higher return than a Bond with a 70% participation rate. Appendix 2 illustrates the returns on both types of Bond, for a range of FTSE 100 index growth levels. 2. Even if the FTSE 100 index were to fall over the five-year term, capital invested in the Issue 5 Guaranteed Equity Bond will be secure and returned to investors in full. 3. In summary, the NS&I Guaranteed Equity Bond Issue 5 offers:
4. National Savings and Investments is one of the largest savings organisations in the UK, offering a range of savings and investments products (to 30 million customers). All products offer 100% security, because HM Treasury backs them. 5. Case Studies are available on request. 6. Further information and digital images are available from the NS&I Media Team. An ISDN line is available for interviews. NS&I Media Team
Media team The numbers below are for media use only. Customers wishing to contact NS&I can find details here.
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