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Money saving expert Martin Lewis hits out at Rishi Sunak’s ‘pants’ green savings bonds rate

Chancellor of the Exchequer Rishi Sunak delivering his Budget to the House of Commons in London last March 2021. PA Photo

Three-year green savings bonds giving savers across the UK the chance to back the Government’s environmental projects have received a mixed response.

The bonds, unveiled in the spring 2021 budget, pay a fixed annual rate of 0.65% over a three-year term.

Some financial experts have said savers could get significantly better rates elsewhere.

But others, including Barry O’Neill, investment director at Carbon Financial, argue investors will be motived to buy the bonds for reason other than greed.

Lend to defend?

Green savings bonds are being made available to take out online via Treasury-backed savings provider NS&I’s website.

Savers aged 16 or over can take out the bonds, which will be on sale for a minimum period of three months, NS&I said. The minimum investment is £100 with a maximum limit of £100,000 per person.

The full amount deposited will be held for three years and cannot be withdrawn during this time.


Martin Lewis, founder of, was critical of the return on offer.

He said: “The Chancellor must really hope that the nation is wearing green trousers as the rate being offered is pants.

“It’s only paying 0.65% interest a year, a paltry amount compared to what’s available on the open market – it only just matches the top easy-access savings account, yet with the green bonds you have no access to your money and it’s locked away for three years.”

Money Saving Expert’s Martin Lewis. Photo: Kirsty O’Connor/PA Wire

Mr Lewis added: “This is quite simply not an account that those whose focus is maximising interest will look at – it’s likely only something those willing to sacrifice substantial interest in order to support what they hope will be green causes are likely to consider.”

Investing for good

Mr O’Neill said potential investors might want to “look at the positives first”.

He said: “The government are raising funds and earmarking them for use to help meet our 2050 net zero commitment. That has to be a good thing, surely?

“The investment is open to all due to the very modest minimum deposit.

“The negative reaction to the interest rate being offered is understandable, but I think it is somewhat missing the point.

“The people drawn to a green bond will be those with an environmental, ethical or sustainable savings and investment objective. They are often willing to accept a lower return on their money and view this as a price they are willing to pay to stay true to their values.”

Even safer than houses

Because NS&I is backed by the UK, it is also one of the safest places for savings, he said.

“All investment decisions involve risk and reward. The more risk you are being asked to take, the higher your expected reward should be,” said Mr O’Neill.

“The security on offer from HM Treasury is greater than any bank or building society, so it really doesn’t have to compete for funds by offering market-leading interest rates in the same way as the less well-known banks that populate the ‘best buy’ interest rate tables. How many of those have you actually even heard of?

“Sure, you have up to £85,000 of protection from the compensation scheme if a bank goes bust, but do you really want the hassle and delay of the claims process if it happened?”

Barry O’Neill, investment director at Carbon Financial Partners

He added the green bonds were one of a number of investment products now available for investors thinking about environmental health and sustainability.

“For those who are prepared to think about longer-term investment, the good news is that it is now possible to invest sustainably without compromising on returns.

“Our clients have access to a range of sustainable portfolios that deliver a significant reduction in the greenhouse gas emissions of the underlying companies, without altering the expected return.

“Making it easy for people to invest sustainably is an obvious way for us to help make our future more secure.”

The landmark bonds are being launched less than two weeks ahead of the COP26 climate conference.

Green investment opportunities

Green projects such as zero-emissions buses, offshore wind and innovative low-carbon technologies will be eligible for funding, along with programmes to help adapt to a changing climate such as flood defences.

Projects to boost living and natural resources such as planting trees, protecting biodiversity and environmentally sustainable agriculture will also be eligible, the UK Government said.

Green bonds will be used to fund a number of low-carbon initiatives including hydrogen buses.<br />Picture by Abermedia / Michal Wachucik

Chancellor Rishi Sunak said: “Our world-first green savings bonds give savers across the UK the chance to back the Government’s green projects and put their money to work in the fight against climate change.

“The UK is already a world leader in green finance and these innovative new savings bonds will deliver both financial returns and environmental benefits, in a transparent and secure way.”

The young are willing to pay for green

The Government said research has found that around 80% of people aged between 25 to 44 would be very or fairly interested in the concept of a green savings product, and 42% of 18 to 34-year-olds would be willing to accept a lower return on their savings if they knew their money was being put towards green projects.

Ian Ackerley, NS&I chief executive, said: “As well as helping the environment, savers will see a fixed return on their investment and will also benefit from NS&I’s 100% security on all capital invested.

“Green savings bonds will be on sale for at least three months, giving savers ample opportunity to invest and the bonds will be available to purchase and manage online.”

The Government will report regularly so savers can see which projects have been funded and the positive environmental impact their investment is making.

Track the metrics

The social benefits of the projects funded will also be published, so savers will be able to track metrics such as the number of jobs created, and SMEs or households who have benefited.

Sean Kidney, CEO of Climate Bonds Initiative, said: “Every government has to green their budgets to meet climate targets. The UK’s landmark green savings bonds show just how that greening can and will be funded. It serves as an example to the world.”

Rhian-Mari Thomas, CEO of Green Finance Institute, said: “Following the success of the UK’s first two green gilt issuances, it’s great to see the launch of the new green savings bonds, which will allow savers to put their money to work for the benefit of the environment.

“This is another important step to channel investment towards building a green, prosperous and inclusive UK economy, and an opportunity for savers to get involved.”

End greenwashing

In the last month, the UK has issued £16 billion of green sovereign bonds, with a record-breaking debut issue of £10 billion that attracted the largest ever order book for a green bond, followed up by a successful second issue of £6 billion.

The UK has also clamped down on “greenwashing” where organisations make misleading environmental claims, and set standards for environmental reporting with requirements for certain large businesses to set out their green credentials.

More information about the bonds is at

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