By Jonathan Owen

03 Oct 2018

Ian Ackerley left the world of commercial banking to join NS&I as its chief executive last year. He speaks to Jonathan Owen about the need to turn Britain from being a nation of spenders to a nation of savers


Photography by Louise Haywood-Schiefer

Saving is not synonymous with most people’s definition of excitement, but Ian Ackerley’s eyes shine with a messianic enthusiasm as he talks about his quest to help transform Britain from a nation of spenders to a nation of savers. The 55-year-old, who has spent most of his career in financial services, took up the role of chief executive at National Savings and Investments in March last year.

The savings bank is best known for selling Premium Bonds, which account for around half of the £157bn in investments made by its 25 million customers. A non-ministerial department, it is owned by the government and was founded in 1861, when it was known as the Post Office Savings Bank.

Unlike any other savings bank in the UK, the funds that people invest in NS&I are fully protected by the Treasury, with a 100% capital guarantee which Ackerley describes as being “as good as it gets”.

We are speaking in the NS&I’s head office in Pimlico, London, where Ackerley has recently completed his first year in post. It’s not only a new job he’s been getting used to, but a new role as a civil servant.


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Ackerley did not start out in life dreaming of a career in finance – his childhood passion was photography, rather than savings. But after completing a degree in psychology at the University of St Andrews, he embarked on a career in management consulting and financial services, including stints at Virgin Money and Sun Life International. Ackerley spent five years as director of investments at Barclays Bank, where he was responsible for its retail investment business, before taking up his new role at NS&I last year.

Asked if he regards himself as a civil servant, he replies: “Yes, formally I am a civil servant but in reality we’re a small financial services firm.” He describes NS&I as “an organisation that’s really focused on the customer, very focused on a sensible commercial mindset” and remarks: “there’s a real delivery culture around here.”

Paying tribute to his fellow civil servants, he adds: “A popular image of the civil servant is: ‘work nine to five, I don’t really care if I produce anything, turn up sit at the desk and walk away’. Not the case: this is an organisation where people really live and breathe it, people are passionate about NS&I.”

One of the biggest surprises to him has been the lack of office politics and “even interacting around the Treasury and government I am amazed at the level of cooperation as opposed to politics with a small ‘p’”.

NS&I is no ordinary bank. Its main purpose is to raise funds for the Treasury in a way that does not disrupt the wider savings market by taking in too much money. Keeping such interests in balance can mean tough decisions have to be made, such as taking products off the market or slashing interest rates they offer to control the flow of investment made by the public.

 “We have to strike that balance between those three objectives – a good proposition for the customer, a fair deal for the taxpayer and not disrupting the industry,” Ackerley says. Surely that’s an impossible task? “It’s always difficult to satisfy three people at the same time, that’s never going to be an easy one,” he acknowledges.

“There are times when we have to make tough decisions, for example we have just reduced the interest rate on our Direct ISA. Why did we have to do that? That’s about striking that balance – we’re paying a lot of interest out on this, that’s probably not good value for the taxpayer, so unfortunately the customer is going to suffer.”

On the other hand, when interest rates rose at the end of last year the NS&I passed on the rise to its customers: “We said actually no, we’re going to move the products up, we’re going to move our prices up because we think customers have a hard time.”

It’s fair to say that Ackerley’s first year in the job has been challenging, with the NS&I involved in the poor handling  of the government’s tax-free childcare scheme, launched just weeks after his arrival.

The NS&I was the delivery partner for the scheme run by HM Revenue & Customs and there were thousands of complaints from parents after problems with the website resulted in people being unable to set up tax-free accounts or access money that had been paid into their accounts.

Government apologised for the difficulties with the scheme and NS&I’s annual report, released earlier this year, said: “We recognise the frustration and inconvenience that these issues caused some parents and we are sorry that this happened.” Ackerley reflects: “I think the issue with tax-free childcare was it was a very complex project” adding that “it was a very painful experience.”

He insists that lessons have been learned as NS&I gears up to deliver the government’s new Help to Save scheme for working people on low incomes, which is due to launch in October. “When it came to Help to Save, the way that solution is structured is very different to the way that  tax-free childcare is structured,” Ackerley says. It is far simpler, with HMRC running the front end and savers setting up accounts directly with NS&I, he explains.

Ackerley is upbeat when asked if he’s happy with the way things have gone since he joined the organisation. “I think we’ve made a huge amount of progress. I think what’s been really exciting is the business has continued to drive down the cost of delivery of financing [for government].” This has reduced by 43% in the past four years, falling from 14p per £100 to 8p per £100.

This year has also seen NS&I start a five-year “Inspire & Invest” strategy which includes aims such as providing cost-effective financing for government, delivering digital first products and services for its customers, and meeting their needs, helping deliver government policy and providing services to business.

“When people don’t have savings if anything goes wrong they fall into debt, and if you’re not careful you end up on that runaway train where you are spending everything you’ve got to pay the debt”

As part of that move towards digital first, NS&I is exploring fintech (financial technology) to help it develop new products or services, For example it is looking at using fintech companies already providing identity services to help prove the identity of young people, rather than creating that capability in-house. When it comes to the organisation’s existing IT system, rather than starting again from scratch, NS&I has modified it. “By using fintech effectively, we’ve put a layer in the IT infrastructure which enables us to much more rapidly build new customer propositions,” he says.

A board effectiveness review earlier this year identified IT and change management as weaknesses, prompting the addition of Paul Habershon as IT and change director to bring “a greater strength in that area and a greater level of expertise,” says Ackerley.

Recent months have also seen the NS&I boss create the retail customer financial services forum, with the backing of Charles Roxburgh, second permanent secretary at the Treasury. This brings together representatives of the Treasury, and organisations such as the Money Advice Service and the Pensions Advisory Service, with NS&I. The purpose, Ackerley explains, is “to get us all into a room to say: ‘We’re all trying to solve the same problem here in many cases. How can we work together more effectively to deliver that?’”

He says: “I think there’s a real sense in the civil service that we’ve got to work much better and closer together, work better across government, and here was an opportunity where, at relatively low cost, we could create a mechanism to do that, and through that we are getting into dialogue about specific opportunities where we can do something to help another part of government deliver policy.”

NS&I is set a series of targets by the Treasury reflecting measures such as how much financing the government needs and how it wants to raise it. This means that the net financing target – the funds that NS&I should aim to raise from the public – is subject to change. Last year’s target was revised down from £13bn to £8bn.

Another target is the value indicator, which shows how much the NS&I is saving the government compared to other ways of raising finance. Ackerley acknowledges that on this measure, the amount of money being saved by using NS&I has reduced sharply over the past decade, dropping from £1.4bn in 2009 to £229m in 2017-18, a year in which it was £21m short of its target.

The decline is the legacy of the financial crisis which has driven down interest rates and narrowed the gap between the cost-effectiveness of NS&I compared to the government raising finance by selling gilts, he explains. And while NS&I did not hit the target it was set last year, Ackerley is proud. “We actually went from £74m [in 2016-17] to £229m which I think by any measure is quite a significant improvement in performance,” he says.

Talk turns to Brexit. Ackerley warns there is a danger that it could result in a “flight to safety” by investors. “Customers will decide maybe to withdraw their money from the investment market and hold it as cash,” he says. “If they do that then we could see, as we did see in the financial crisis, a substantial flow of money into NS&I as people just look for somewhere to park money for a time, while they wait and see.”

But he stresses that NS&I would not seek to exploit any such event. “It’s not like a commercial situation where if you were the only player in the market with a 100% capital guarantee, given that scenario you would gun it and go for as much money as you could. That’s not what we’re here for.

 “We’re here to deliver value for the government, deliver value for the taxpayer and for the customer and keep that market stable so in a scenario like that you try to encourage people to stay where they are.”

When it comes to encouraging fiscal responsibility, “what will make the big difference to people and to this country is if we can get a much stronger savings culture because the problem we face is when people don’t have savings that means immediately anything goes wrong they fall into debt and once you get into debt then you stop saving and if you’re not careful you end up on that runaway train where you are spending everything you’ve got to pay the debt.”

Things have changed since he started working “in the good old days of generous final salary pension schemes”. Such schemes don’t exist any more and if people aren’t saving enough they will be in for a shock, he says. “A lot of people say ‘I’ve got 50 grand, great I can retire’ but that will get you £1,500 a year to live off as an annuity, there aren’t that many people who can live off £1,500 a year.”

There’s no “single magic bullet” when it comes to encouraging people to save, Ackerley says. The challenge needs a mixture of initiatives, such as providing “compelling” savings products for people to invest in, and helping other areas of government deliver policies designed to get people saving.

As for NS&I, Ackerley appears to be in it for the long haul. “There’s a huge amount to do here and it’s really exciting,” he says. “I care really passionately about what we can do to help the lives of people and if there was talk of a legacy it would be around that, that’s the thing I’d be really keen to leave behind is to make a significant contribution to improving people’s ability to save, their willingness to save.”

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