There will be ‘a lot of interest in the new Green Savings Bond’
Plans for a new savings scheme for the public to help fund the Government’s environmental projects are “a very innovative move.”
That’s the view of Midlands energy expert Ron Fox on hearing more details announced recently about the Green Savings Bond from National Savings and Investments (NS&I), the state-owned savings bank which issues Premium Bonds.
Anyone over the age of 16 will be able to put in between £100 and £100,000 by going online at www.nsandi.com or ringing 0808 500 7007 for help. Savers will receive the interest as long as they do not withdraw any of their savings during the three-year term.
Ron said the idea, which had been first announced in the last Budget by the Chancellor, Rishi Sunak, was designed to raise billions of pounds help fund infrastructure schemes, so the government can hit its net-zero carbon emissions target by 2050. These include offshore wind and hydrogen power, zero emission buses and boosting biodiversity and natural resources such as tree planting.
It will also assist the UK’s economic post pandemic recovery by creating jobs in the green energy sector.
In effect, the money will go to Whitehall to spend on these products, rather than the public investing directly in a specific environmental scheme.
“The bond should be very attractive to savers,” said Ron, of Noreus Ltd, “as their money is 100 per cent guaranteed by the government and they will be receiving a fixed rate on their investment over the three years.”
Up to £85,000 per person, and per bank, building society or credit union is guaranteed for savers under the Financial Services Compensation Scheme.
“Although the bond was originally due to be unveiled this summer, the bonds will now go on sale later this year,” said Ron, on the University of Keele Science and Innovation Park in North Staffordshire.
“Although we don’t know the launch date nor the interest rate it will need to be competitive to attract investors, particularly those who want to save safely in green projects.”
At the moment the average rate for three-year bonds on the market is 0.76 per cent a year with the highest 1.26 per cent.
Although the Treasury has described it as a world-first there are a number of other “green” savings products available to savers, such as those that fund tree planting projects or lend to environmental projects. But unlike the NS&I which is guaranteed by the government, others often rely on the projects to be successful before paying any kind of return.
The bond launch comes as ministers prepare to host the COP26 climate conference in Glasgow in November.
“I think there will be a lot of interest in this investment,” concluded Ron, “because in recent years, savers have been starved of any kind of decent returns due to the cheap rates of borrowing.”
For more information on green projects for your home and energy saving ideas, call Ron on 0845 474 6641.
Caption: Digging in – investors can boost their income and help the environment such as planting more trees with the Government’s new Green Savings Bond.