In a significant pre-Christmas announcement, National Savings and Investments (NS&I) has delivered what it calls 'pleasing' news for its entire customer base of 24 million Premium Bonds holders.
Budget Change Drives New Target
This update follows a challenging year for savers, during which NS&I cut Premium Bonds rates on three separate occasions in 2025. The positive shift stems from the Labour Party's Budget, which confirmed that NS&I’s Net Financing target for 2025-26 has been increased to £13 billion.
This represents a substantial rise from the original target of £12 billion set during the Spring Statement earlier in the year. The revised goal is designed to work alongside finance raised by the Debt Management Office (DMO) through gilt issuance, collectively meeting the government's financing requirements for the financial year.
Strong Quarterly Performance
Accompanying this target revision, NS&I published its unaudited results for the second quarter (July-September) of the 2025-26 financial year. The data revealed that NS&I delivered £1.4 billion of Net Financing in Q2. This brings the half-year total to a robust £3.9 billion.
NS&I Chief Executive, Dax Harkins, commented on the development. "Our Net Financing target for 2025-26 was set at £12 billion – £3 billion higher than the previous year – and we are pleased to be able to support a further increase of £1 billion, taking the target to £13 billion," he said.
Harkins added, "Our pricing is designed to meet this revised target and maintain market stability, and we expect our performance to continue steadily through the second half of the financial year."
What This Means for Savers
For the millions of people who hold Premium Bonds, this financial update is theoretically positive. The increased government funding target makes it less likely that NS&I will implement another rate cut in the near future, providing a more stable outlook for their savings.
It is important to understand that NS&I's reported Net Financing is a key measure. It represents the net change of NS&I funds, calculated from total inflows from deposits and retained maturing funds, minus total outflows from withdrawals and prize payments. A positive Net Financing figure, as seen this quarter, signifies a positive contribution to government financing. This calculation excludes Green Savings Bonds, which are classified as a policy product.
