George Osborne announces £2bn Lloyds bank shares to go on sale to public

Members of the public using cash machines at a branch of Lloyds Bank in the City of London. Photo:

Members of the public using cash machines at a branch of Lloyds Bank in the City of London. Photo: Stefan Rousseau/PA Wire - Credit: PA

Shares in taxpayer-backed Lloyds Banking Group will be made available to retail investors in the spring, Chancellor George Osborne has announced.

Some £2 billion worth of shares will be up for grabs and will be sold at a 5pc discount to the market price.

In a bid to avoid wealthier investors snapping up the lot, anyone applying for less than £1,000 worth will be prioritised.

Investors will also be awarded a bonus share for every 10 purchased if they hold their investment for more than a year. The bonus share incentive will be capped at £200 per investor.

The Government pumped more than £20bn into Lloyds in a bid to prop up the bank in the midst of the financial collapse.

It has been gradually selling shares off to institutional investors, but this marks the first chance for the general public to get involved.

Speaking on ITV1's Good Morning Britain, Mr Osborne said of the sale: 'We are selling Lloyds shares to members of the public, people watching this programme, small investors, people who are going to have a chance to get something back having put all that money in under the last Labour government.'

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All proceeds from the sale will be used to pay down the national debt.

Releasing more details of the sale, the Treasury said military personnel stationed overseas and their spouses would be able to participate, where possible.

'There will be a nationwide TV, print and digital information campaign to provide further details ahead of the sale,' it said. 'This will outline the next steps for people who wish to apply for shares.'

Those interested in buying shares can receive updates when more details become available about the sale, by visiting the following page and entering their email address

When the sale is opened to the public, investors will be able to apply either online or by post.

The Government has so far recouped £15 billion of the £20.5 billion it spent rescuing Lloyds, and currently owns just under 12pc of the bank.

Mr Osborne told Sky News: 'We've got a big task here, which is to finally get the British Government out of owning great chunks of our banking system.

'We've made a lot of progress with Lloyd's, but this final chunk, this final sale, will be the biggest privatisation in over 20 years, and I don't want all of those shares to go to City institutions. I want them to go to members of the public.

'Our offer is this - buy Lloyds shares, we will favour small investors, we will favour those who hold the shares for a long time, you will get a discount, and we'll help create that share-owning democracy we want to see in this country.

'The process of getting the paperwork ready and making sure the prospectus is there takes a little bit of time, because those are the rules. But the shares will be coming on sale very soon and as of now there is a website where people can register to make sure they are kept informed and then they can get in there and get these shares with the discount.'