■ (the Bank of England base rate less 0.1 per cent multiplied by the balances outstanding) less (the interest and prizes payable to its customers plus tax foregone by Inland Revenue on tax free products)
The calculation is completed by deducting NS&I's operating costs. So the lower NS&I's operating costs, the greater added value will be.
6 From April 2002, NS&I changed the added value measure to enable comparison between the audited accounts of the business and the value added measure. The key change made was that value added on fixed rate products is now recognised over the life of the holding rather than being recognised at the time of sale (on a net present value basis).
7 To calculate the 'delagged' value added measure the 'lagged' measure is adjusted for the timing difference between yield or base rate movements and the new rates coming into effect.