Question: What is National Savings and Investments?

Alan Cook: Our primary responsibility, and it sounds a bit jargony, is to raise cost effective financing for the government.

So, government can either raise finance through the wholesale markets, which you and I would recognise as the gilt market, or the retail market, which is effectively going to individuals in this company and asking them to invest their money in us.

And I report to Ruth Kelly, economic secretary at the Treasury.

Question: Why should someone invest with National Savings and Investments? What's different about your services?

Alan Cook: I think the thing that has been bandied the most in the last year or two has been the security angle.

And I'm not saying that other financial services providers are insecure but the notion that most people would feel comfortable with is that it doesn't get more secure than investing in an organisation which has HM Treasury backing.

We also have unique products, in the form of premium bonds, which you can't buy elsewhere. It's almost like instant access savings, but instead of getting interest you get prizes, so there is an element of fun in it.

But its still a serious investment and not a flutter. A flutter implies that you might lose your money but here you don't lose your money: we don't have any product where you can do anything other than at least get all your money back.

We're not in the game of knocking other products or providers but the security developments of late make our proposition seem very clean, straightforward and honest. There are no charges and complete transparency.

Could you find a better rate somewhere else? You probably could but in the current environment it's not going to be much more and you've got complete peace of mind with all of our accounts, bonds and certificates.

Question: So what sort of other products do you offer?

Alan Cook: Well, we have our guaranteed equity bond. This is as near as NS and I gets to participating in the stock market in the sense that it tracks the FTSE 100 and will then pay a percentage of the growth in return for an absolute guarantee that you will get your money back.

For example, in the one that finished a few weeks back, we paid 95 per cent of stock market growth.

We now have half a billion invested in our guaranteed equity bonds since they were launched the year before last.

In a typical six-week tranche, we are doing five or six times as much as any of our competitors.

So whilst it's not a new product in the sense that other providers can offer them, it is unique in the sense that we do it to a scale that no one else does.

The other product we do which is unique - others could do it but tend not to - is that we have a retail price indexed linked version of the savings certificate.

The principle here is that we pay the customer the retail price index plus a bit extra. The amount of that 'bit extra' would vary depending on where interest rates are.

The return is tax free, so its one of the few places you can be absolutely sure that you can invest in cash and know that your money will grow in real terms.

At the moment the retail price index is relatively high in relation to interest rates. So when you add the two together and allow for the higher rate tax, then we're paying the equivalent of about six per cent gross - and you can't get six per cent anywhere else with cash on deposit.

This percentage obviously goes up and down in line with inflation, but the point of the proposition is that it is always growth in real terms - a unique proposition.

At the moment the extent to which we've grown over the last year is down to Premium Bonds and guaranteed equity bonds - they are both imaginative and successful products.

But the Index-linked Savings Certificate is something that we're going to make more noise about going forward because it is now a seriously good proposition.

Question: It's been documented that Britons face a savings gap. Is NS and I striving to help solve this problem?

Alan Cook: I guess there isn't a retail financial services provider out there that doesn't want to play a part in closing the savings gap and we're no different from any other.

We may be being a bit more successful than others, in the sense that since September 2002, we've taken in the best part of £4.5 billion from private individuals.

So if the savings gap is reputed to be £27 billion, the fact that we've bought in £4 billion over the last 15 months is quite an achievement.

This means that we're playing as bigger part as any in trying to address this issue.

Question: Why did this savings gap develop in the first place?

Alan Cook: We are basically saying that if everyone wanted to be adequately provided for in their retirement, then there is an expected level of saving that needs to be taking place.

The difference between this level and what is actually being saved by the British public today is about £27 billion.

But the actual amount is less important than the notion that, as a country, we all aren't saving enough for our future.

NS and I focuses on longer term savings so we're not really out to be a bank - we don't have cheque books and we don't do bill paying. You put money in National Savings and Investments because you are saving for your future.

Question: Graduates are often faced with a range of options when first entering the job market, such as pensions, buying property and student loans. How can they be expected to save at the same time?

Alan Cook: I think the savings profile of an individual is going to change during their lifetime. There are periods when one will find it difficult to save and there are other periods when its really important.

If you're saving for long term retirement purposes, then the earlier you start, the less you have to save per month.

But I think we fully recognise that we need to offer a range of products that meet different needs at different times.

So we have things like Children's Bonus Bonds for parents and grandparents to save for kids when they are younger.

Right up the other end we have pensioner's bonds for people who have saved and want somewhere to put it so that they can live off their interest.

We also have a good range of tax-free savings products for people to invest in during their working lives.

We are planning to launch at the end of January a new instant access savings account where the minimum deposit will be £100 and thereafter you can save monthly by standing order.

So I think we have a full range of products really.

We're not suggesting or pretending that everything an individual saves in their life should be saved with us. But what we are saying is that with the products we have, most individuals should have some element of National Savings and Investments products.

We just think its vital that everyone should consider NS and I as part of their savings portfolio.

Question: Is there anything more that the government should be doing to encourage individuals to save?

Alan Cook: Actually, I think the government has been pretty active in this area.

The whole Sandler initiative for example is all an attempt to demystify, reduce costs and make financial services products more transparent.

All of the products that NS and I sells are effectively Sandler compliant: they are widely available and there are no hidden charges.

The government's savings strategy is about encouraging providers to offer clear and easy to understand low cost transparent products. All NS and I products fall into this description.