The announcement the UK is to launch the “world’s first” sovereign green savings bond for retail investors was made last month, shortly before the Spring 2021 Budget. It was confirmed at the time the green savings bond would be offered through NS&I, which also offers Premium Bonds and other savings products.
“We’re offering a green savings product on behalf of government,” a notice on the website reads.
It adds that this product will be “coming later” in 2021.
The notice on the website gave some more insight into the new product.
NS&I states: “We’re working with government to give UK savers like you the opportunity to contribute towards projects that will accelerate the transition to a low carbon economy, create green jobs, and support the collective effort to tackle climate change.
“More details will be coming soon, including information about the savings account and how you’ll be able to invest.”
Funds raised will be earmarked for projects such as renewable energy and clean transportation, intended to help the UK “build back greener”.
The move is said to be intended to help the UK meet its target to cut greenhouse gas emissions to net zero by 2050, HM Treasury said.
The Chancellor Rishi Sunak said: “The UK is a global leader on tackling climate change, with a clear target to reach net zero by 2050 and a Ten Point Plan to create green jobs as we transition to a greener future.
“In a world first, we’re launching a new green savings bond which will give people across the UK the opportunity to contribute to the collective effort to tackle climate change.
“And we’re also launching new competitions that will unlock innovation in renewable energy and help us develop the cutting-edge technology we need to reach net zero.”
Ahead of the announcement of further details, there’s been speculation about what it could mean for savers.
Rob Burgeman, investment manager at Brewin Dolphin, said: “There is no doubt that raising money for these key national infrastructure projects is crucial so we can invest in a carbon-free future.
“However, hard-nosed savers will need to weigh those objectives up against the savings rates of this new product.
“When an NS&I income bond is giving you a return of just 0.01 percent, the UK inflation rate is 1.4 percent, this is not what investors and pensions need to stop their savings being ravaged by the corrosive effects of inflation.
“What is important to people, and those relying on income particularly, is what interest rates are going to be paid.
“Over the last few years NS&I products have seen nothing but cuts, cuts, cuts.”