The sale of the Government’s remaining shares in NatWest has been abandoned, as the General Election campaign commences.

The announcement came after the Chancellor, Jeremy Hunt, said that the Government was offering the public the chance to buy shares in the bank, with an advertising campaign set to launch in the summer.

The Government stake in the lender dropped to less than 30% earlier this year, for the first time since it was bailed out in 2008, valued at just under £7bn, no longer making it a controlling shareholder.

However, since the announcement of the General Election on 4 July, the scheme has been scrapped.

Investment strategist at Quilter Investors, Lindsay James, said: "The summer had been earmarked as the penultimate chapter in terms of reducing the government’s ownership of NatWest, with the launch of a retail offer harking back to the ‘Tell Sid’ campaign of the 1980s. The Government's stake once sat as high as 84% when it propped up the company back in 2008, but it was expected to reduce this from where it currently sits, at just under 30%, down to 10%.

"NatWest’s share price has been doing reasonably well in the last year, and the Treasury was likely hoping to be opportunistic in monetising this as the sale would have brought in around £6bn. Shares have performed well of late, and while banking stocks are not the most exciting, it had the potential to generate interest amongst the investing public.”

Research by Hargreaves Lansdown has found that a quarter of people said they have invested in privatisations between the late 1970s and 2014.

Furthermore, of this group, a third (34%) said they still hold at least one of the companies they invested in.

For one in five (21%), this investment was a gateway, leading them to build a portfolio of investments. Almost two in five (38%) took advantage of the scheme but then sold up without going any further on their investment journey.

Head of money and markets at Hargreaves Lansdown, Susannah Streeter, said: "The NatWest share sale, announced by Chancellor Jeremy Hunt, has been put on ice, due to the General Election campaign. The Spring Budget 2024 set out that a sale would take place this summer at the earliest, subject to supportive market conditions and achieving value for money for the taxpayer. But now the retail offer will not happen during the election period.

"Schemes like this have the power to encourage new investors, so it’s hoped this will be revisited by whoever wins the election. Past privatisation schemes, brought in newcomers and super-charged investing habits for many novice shareholders, but others refrained from dipping their toe further into the market, and heightened interest in the stock market ebbed away during following years.

"With the scheme on hold but still a possibility, it’s worth looking at the investment lessons to take away from shareholder behaviour following previous privatisations, including the famous Tell Sid campaign promoting the British Gas share sale."

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