Press Release

112% OF ANY FTSE GROWTH WITH NEW GUARANTEED EQUITY BOND FROM NS&I

29 April 2006

• First new GEB in a year - on sale 3 May 2006
• Invest online, by phone or by post
• Can be invested in a SIPP with tax-efficient benefits

National Savings and Investments (NS&I) is to launch its first Guaranteed Equity Bond in 12 months on 3 May 2006 which will offer a return equal to 112% of any growth in the FTSE 100 index over the five-year term of the Bond, without any risk to investors' capital.

And, for the first time, this guaranteed equity bond can be invested in through a SIPP (self-invested personal pension).  Provided the total investment in the SIPP does not exceed the lifetime limit in 2011-12, the returns will be free of UK income tax.

112% of FTSE growth

This new GEB offers a gross return equivalent to 112% of any growth in the FTSE 100 index over the five-year term, with no upper limit or cap on the return.  The 112% figure means the investment will earn a return equivalent to all of the growth in the FTSE 100 index over the five-year term, plus an extra 12% of FTSE growth on top.

For example, if the FTSE 100 index rose by 20% over the five-year term, £10,000 invested would earn a gross return of £2,240 (customer receives £12,240) at the end of the five years - i.e. 22.4%.  If the FTSE rose by 30% over five years, £10,000 would earn £3,360 (customer receives £13,360, i.e. 33.6%).

If the FTSE 100 index falls or fails to rise over the term, investors' initial investment is returned in full.

Market-leading offer

The 112% share in the FTSE 100 index makes it one of the most competitive guaranteed equity bonds of this type on the market at the moment, and the only one on the market with a sovereign guarantee.

Provider	NS&I	Bank of Ireland - Isle of Man	Bristol & West	Britannia Building Society
Name	Guaranteed Equity Bond	Guaranteed FTSE Bond 4-5 yr	Guaranteed FTSE Bond 5yr	Guaranteed Capital Bond 5yr
Participation rate	112%	105%	105%	110%
Minimum return	100%	100%	100%	100%
Term	5 years	5 years	5 years	5 years
Minimum investment	£1,000	£5,000	£2,500	£500
Averaging	Five days initial averaging and six months final daily averaging	Monthly readings over last year of investment	Monthly readings over last year of investment	Monthly readings over last year of investment
Charges	No	No	No	Included in terms

Source: Structured Retail Products (correct at 24 April 2006)

'A great opportunity'

Trevor Bayley, National Savings and Investments chief executive, said: "This new Guaranteed Equity Bond, and our first for a year, is a great opportunity for any investor looking for a cash deposit where the returns are linked to the performance of the FTSE but will also beat that performance by a further 12%, as long as the FTSE rises over the five years.

"On top of that, all capital is guaranteed to be 100% secure, even if the FTSE falls, and you can invest from the comfort of your own home, either online or by phone.  It couldn't be simpler."

NS&I GEB offer period

Issue 11 of the GEB goes on sale for a limited period of eight weeks from 3 May to 27 June 2006.  It may close earlier if fully subscribed, so investors are encouraged to buy early, particularly because their investment will earn interest at 4.00% p.a. gross during the eight week offer period, paid when the Bond matures.  The minimum investment level for this GEB remains at £1,000 and while the maximum investment is £1 million per person or £2 million for a joint investment.

How to buy NS&I's Guaranteed Equity Bond

Investors can apply online at www.nsandi.com, by phone with a debit card on 0500 500 000 or by post using an application form which can be requested by phone or downloaded from NS&I's website at www.nsandi.com.  Application forms for the NS&I Guaranteed Equity Bond will not be available at the Post Office.

High demand

Demand has been high for NS&I's previous issues - the first 10 sold over £1 billion since issue one was launched in March 2002 - and more than 55,000 people have asked to be given advance information about Issue 11.  A further 17,000 people registered using NS&I's online service, launched in January 2005.

NS&I Guaranteed Equity Bond key features

• A five-year investment
• Minimum investment of £1,000, maximum of £1 million (£2 million for joint investments), maximum online investment £99,999 per person
• A gross return linked to any growth in the FTSE 100 index over the term
• A competitive 112% participation rate
• No cap, giving unlimited growth potential
• 100% guarantee that all of a customer's original capital investment will be returned at the end of the five-year term, regardless of the performance of the index, backed by HM Treasury
• On sale for a limited period from 3 May to 27 June 2006, may close earlier if fully subscribed
• Any returns from a GEB not held within a SIPP will be subject to income tax in 2011-12 so must be declared to the Inland Revenue
• Investors do not receive dividends from this guaranteed equity bond.