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The government-backed National Savings and Investments (NS&I) has recorded its strongest ever set of annual results for the last financial year.

Reporting its annual results for the year ending March 31st the savings and investment provider, NS&I confirmed sales for the year, including reinvestments, reached £15.5 billion.

This is up 9.9 per cent from the £14.1 billion recorded for the 2006/07 financial year.

It is thought the uptake in demand was due primarily to unexpectedly high levels of customer interest and investment in NS&I products as a result of the 'flight to safety' following the events of last autumn.

As NS&I investments are backed by the government they have a virtually 100 per cent capital security.

"The past year has seen us take in £15.5 billion in sales and reinvestments, and save UK taxpayers £375 million by reducing the cost of government borrowing," announced NS&I’s chief executive, Jane Platt.

"It has been an exceptional year. We’ve coped well with unexpectedly high levels of demand while maintaining a strong customer focus in a time of turbulence in the markets and change within the organisation."

NS&I total funds grew by £5.9 billion over the course of the year, compared to growth of £5.6 billion in 2006/07, according to the report, which will now be presented to parliament.

The growth in sales led to the total amount now invested in NS&I to rise by 7.5 per cent from £78.9bn in the previous financial year to £84.8 billion in 2007/08.

NS&I is one of the UK’s largest savings and investments providers, with 28 million customers and offers retail savings and investments backed by HM Treasury.

Its total balance of funds now represents about 16 per cent of the national debt.

"Our new five-year strategy, 'NS&I adding value', has been launched successfully and we’ve made significant progress in simplifying, modernising and diversifying the business in a sustainable way," added Ms Platt.