Martin Lewis offers advice on reinvesting in NS&I bonds
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Green Savings Bonds will soon be available for savers in Britain. The environmental savings product was announced by the Chancellor of the Exchequer in the Spring 2021 Budget. The Bonds are all part of the Government’s green agenda. Express.co.uk has compiled a full guide to explain how these Bonds work and how you can purchase them.
What are Green Savings Bonds?
Chancellor Rishi Sunak announced plans for a new savings product during his Spring Budget this year.
These savings products are designed to raise billions for environmental projects such as wind and hydrogen power.
They are designed to assist in the Government’s plans to hit net-zero carbon emissions by 2050.
Green Savings Bonds will help finance the Government’s green spending projects designed to tackle climate change and make the environment greener and more sustainable.
Projects funded by the Bonds are likely to include greener transport, renewable energy, fighting pollution, efficient energy sources, protecting natural resources and adapting to a changing climate.
Mr Sunak is expected to announce plans for £15bn of these bonds on Thursday.
He will use a speech at Mansion House in the City of London to reveal more details of the scheme – which is expected to be one of the biggest issues of green bonds in the world.
Ian Ackerley, NS&I Chief Executive, said: “We are delighted to be offering a new savings product on behalf of the Government and playing a key role in contributing towards the UK’s Green agenda.
“This exciting new Bond will be available to purchase from nsandi.com later this year and will give UK savers the opportunity to contribute towards green projects to help make the world greener, cleaner and more sustainable.”
The Treasury-backed savings products will be made available through NS&I, which also offers Premium Bonds.
Germany and Sweden have similar offerings for institutional investors.
The Bonds will offer savers a chance to support green projects at a fixed rate over a three-year term.
They will be available to those aged 16 or over, with a minimum investment of £100 and a maximum limit of £100,000 per person.
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Anyone hoping to purchase these Bonds must have a UK bank account capable of receiving BACS payments.
The Bonds are designed to be held for the full three years, but there is a cooling-off period during the first 30 days of investment.
The fixed rate of interest is guaranteed for the whole term, with interest earned daily.
The daily interest accumulations will be added once a year on the anniversary of your investment and paid on maturity.
Interest is earned without deducting any tax at source and interest is taxable so it will count towards the customer’s Personal Savings Allowance in the tax year that their Bond matures.
This will need to be declared by the individual based on their personal tax circumstances.
Further details on NS&I’s Green Savings Bonds, including the interest rate, will be available later in the year.
NS&I Bonds are often attractive to savers because the money saved is 100 percent guaranteed to be safe by the Government.
Up to £85,000 per person, and per bank, building society or credit union is guaranteed for savers elsewhere under the Financial Services Compensation Scheme.
Although the interest rate for the new Green Savings Bond has not yet been declared, the average rate for three-year bonds on the market is 0.76 percent a year.
The most generous interest rate for a current three-year bond is 1.26 percent a year.
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