§ Mr. Langasked the Chancellor of the Exchequer what assumptions were made about future levels of minimum lending rate by the Treasury when it announced on 16 November 1979 that the National Savings Bank investment account rate, with effect from 1 January 1980, would be 15 per cent.; and if he will make a statement.
§ Mr. LawsonNo such assumptions were made. The higher investment account rate announced on 15 November 1979 reflected the increase which had taken place in the general level of market interest rates and was intended to restore the competitive position of these accounts in relation to alternative forms of personal saving.
§ Mr. Langasked the Chancellor of the Exchequer what was the level of reserve ratio for funds in the investment department of (he National Savings Bank at the latest date for which figures are available; what was the comparable figure 12 months earlier; and how it has been determined.
§ Mr. LawsonAt 31 December 1979 the investment account general reserve ratio of the value of the fund was 1.26 per cent. (£19.6 million). At 31 December 1978 the ratio was 2.16 percent. (£26.6 million).
The general reserve represents the accumulated surplus of income over expenditure retained within the fund.
§ Mr. Langasked the Chancellor of the Exchequer what percentage income the National Savings Bank earned during the last 12 months for which figures are available on its investment account funds; and what proportion of that figure was levied for expenses on the investment account.
§ Mr. LawsonThe income to the investment account fund for the year to 31 December 1979 represented 11.04 per cent. of the mean balance owing to depositors. Of this figure 0.35 per cent. represented management expenses.
170W
§ Mr. Langasked the Chancellor of the Exchequer (1) how many active and how many dormant account holders the National Savings Bank has; and how the distinction between active and dormant accounts is defined;
(2) at the latest date for which figures are available, how many active account holders the National Savings Bank has in its ordinary and investment account departments, respectively; what is the average balance per account in each department; what were the comparable figures 12 months earlier; what proportion of management expenses was borne by each department in each year; and how National Savings Bank management expenses are determined.
§ Mr. LawsonThere were 41.2 million ordinary accounts classified as inactive at 31 December 1979. These are accounts which have been unused by the depositor during the previous five years. No similar distinction is made for investment accounts or ordinary accounts opened since July 1968 for which records are held on a computer.
The following information is based on the most recent common dates for which figures are available:
Account Number of currently maintained accounts* Average balance Ordinary: £ 31 March 1980 20.1 million 90.42 31 March 1979 20.6 million 89.94 Investment: 31 March 1980 1.4 million 1,125.27 31 March 1979 1.2 million 1,085.20 * The number of account holders as opposed to the number of accounts is not available. The apportionment of NSB management expenses between the ordinary and investment accounts for the year to 31 March 1979 was, respectively, 93.3 percent. and 6.7 per cent., and for the year to 31 March 1980 91.1 per cent. and 8.9 per cent.
Management expenses include all the costs of the National Savings Bank, Glasgow, part of the costs of the 171W Department for National Savings headquarters, and the costs incurred at post office counters and in other Government Departments on work for the National Savings Bank.