§ Lord Marlesfordasked Her Majesty's Government:
What was the cost of administering the ordinary accounts of National Savings as a percentage of average total balances in 1970–71; and whether they believe that the average administration cost of 4.2 per cent of balances in the 16 million accounts in 1999–2000 would be reduced if the £10,000 limit on the accounts set in July 1969 were to be increased to take account of inflation. [HL3242]
§ Lord McIntosh of HaringeyThe cost of administering ordinary accounts in 1970–71 as a percentage of total balances was 1.6 per cent. In real terms the cost of administering ordinary accounts reduced significantly during the period 1970–71 to 1999–2000; however the total amounts invested during the same period have reduced at an even greater rate in real terms.
106WANational Savings does not believe that average administration costs of 4.2 per cent would reduce significantly if the £10,000 limit was increased to take account of inflation. Less than 0.01 per cent of ordinary account customers have £10,000 invested and even if all these customers increased their investments fully up to the inflation adjusted limit, the cost of administering the ordinary account would reduce to 3.9 per cent. However, it is unlikely that customers would invest up to the new limit in an ordinary account as there are a number of more appropriate accounts for such sums of money offering higher rates of interest from both National Savings and other financial institutions.