COVENTRY MESSAGE BOARD

Rishi Sunak calls move 'world first'



The UK will launch the world's first sovereign green savings bond for retail investors, allowing savers to help drive the country's transition to net zero by 2050, the Chancellor is expected to announce at Budget next week. HM Treasury said last night the green savings bond will be offered through NS&I.

Chancellor of the Exchequer Rishi Sunak said: “The UK is a global leader on tackling climate change, with a clear target to reach net zero by 2050 and a Ten Point Plan to create green jobs as we transition to a greener future.

"In a world first, we’re launching a new green savings bond which will give people across the UK the opportunity to contribute to the collective effort to tackle climate change.

"And we’re also launching new competitions that will unlock innovation in renewable energy and help us develop the cutting-edge technology we need to reach net zero.”

HM Treasury last night said the move will give UK savers opportunity to contribute to a greener future, and transition to net zero.

The Government said it means that via the bonds they buy, the savers will be contributing towards projects that will accelerate the transition to a low carbon economy, create green jobs, and support the collective effort to tackle the climate crisis, whilst saving money at the same time.

These new green savings bonds will be offered through the Government-backed savings provider NS&I.

Money raised via the bonds will be earmarked for projects such as renewable energy and clean transportation that will help the UK "build back greener" and meet its target to cut greenhouse gas emissions to net zero by 2050, the Treasury said.

Further details are to be set out in the coming months.

New NS&I 'green bonds' likely won't pay savers best buy rates



The Treasury's much anticipated 'green savings bonds' could be a major disappointment for rate-starved savers, according to experts.

Chancellor Rishi Sunak announced in the Budget that everyday Britons would be able to help fund the country's green recovery from the pandemic through bonds offered by National Savings & Investments.

Details remain thin on the ground beyond the fact the bonds will be launched this summer, but figures from the Office for Budget Responsibility forecast NS&I is set to raise just £6billion from savers in 2021-22, down from £20billion this financial year.

And even that latest forecast represents a drop on the £35billion NS&I was supposed to raise in 2020-21, after £13billion was pulled out of the Treasury-backed bank between October and January after cuts to its best buy rates.

This fundraising target covers all existing NS&I accounts, including Britain's best-loved savings product, Premium Bonds, but does not include the estimated amount that will be raised from the new green bonds due to launch in the summer.

However, with the Treasury looking to raise just £6billion from NS&I deposits and the bank cutting rates to as low as 0.01 per cent last year, it suggests it is not necessarily in the mood to raise billions of pounds from savers at market-leading rates.

And even if the bonds raised £6billion, doubling NS&I's take next year, this would represent less than half the £13billion raised by the sale of over-65 Guaranteed Growth Bonds, or Pensioner Bonds, in January 2015.

'Given these estimates, it is unlikely that these "green savings bonds" will be around for very long or be particularly competitive', Anna Bowes, co-founder of the analyst Savings Champion, told This is Money.