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NS&I’s new Green...

26 July 2021

2 min read

NS&I’s new Green Savings Bonds – details revealed

NS&I has revealed its Green Savings Bonds, due to launch later this year, will be three-year fixed-term products.

Jeannie Boyle
Jeannie Boyle,

Executive Director & Chartered Financial Planner

The UK Government has announced plans to issue the world’s first retail ‘green’ savings bonds through the Treasury-backed National Savings & Investments (NS&I). The money will be used to finance environmentally focused infrastructure projects that help the UK meet its net zero target.

Money raised with NS&I’s Green Savings Bonds will be used to finance six types of green projects:

  • Clean transportation
  • Renewable energy
  • Energy efficiency
  • Pollution control & prevention
  • Protecting natural resources and
  • Climate change adaption.

To avoid concerns over ‘greenwashing’, annual reports on the social and environmental impacts of the projects will be published.

This retail offering is being issued alongside the UK’s first ever sovereign green bond – or green gilt; together they form a part of the UK’s commitment to reaching net zero by 2050. In advance of issuance, The Carbon Trust has reviewed the Government’s intended allocation of proceeds. They confirmed that the allocations ‘align sensibly’ with the UK’s climate targets and stated they ‘are confident that the programme will contribute to achieving net zero by 2050’.

How much interest will you be able to earn?

We don’t know yet what rate of interest the bonds will pay. The government has not included these bonds in NS&I’s normal funding target, so there is the possibility the rate of interest will be higher than standard NS&I products. Anyone holding an NS&I account will be aware that interest rates were slashed last year. The decision to hold interest rates at market leading levels meant they had overshot their government targets by £3billion.

The bonds will have a three year term with a fixed rate of interest paid. There will be a 30-day cooling off period, but you need to be certain you won’t need to access your money before subscribing. As with all NS&I products, your savings will be backed by HM Treasury, so they are secure.

Crucially, the interest won’t be paid until the bond matures – so, for tax purposes, you’ll receive three years of interest in one go. This will count towards your personal savings allowance and may trigger a tax bill if you exceed it.

Green ambition

Britain is keen to position itself as a green finance leader in the run-up to hosting COP26, the international climate summit, in November.

There is hope that the UK’s inaugural green bonds will mark the beginning of an ambitious green finance journey. Currently. there are relatively few secure options for those of us concerned by where our money goes once, we deposit it with High Street banks. These bonds could be a good option if you are looking to make an impact with your money and you are happy with the three year period.

Jeannie Boyle

Jeannie Boyle

Executive Director & Chartered Financial Planner

Jeannie has been working in financial services for over 14 years. She joined EQ in 2008 as a Technical Consultant and since 2010 has been a Director of the firm. When providing advice, Jeannie focuses on clear communication, so that her clients fully understand the facts, options and recommended solutions, enabling them to make well-informed decisions. As a Director, Jeannie concentrates her efforts on ensuring the advice provided across EQ is of an exceptional standard, putting in place processes and systems to ensure our clients remain at the heart of our business. Jeannie is a Chartered Financial Planner, a Fellow of the Personal Finance Society and in 2015 won Money Management’s Ethical Financial Planner of the Year Award. She appears regularly in national and trade media outlets discussing personal finance issues. Outside of work, Jeannie enjoys yoga, hiking, triathlons and live music.



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