The Lloyds share sale could help create a new generation of investors in the stock market and a positive shift in financial culture, the UK’s wealth managers said this week.

Analysts said the chancellor’s generous terms meant that anyone applying for £1000 of shares would be looking at an equivalent 20 per cent return by holding onto them for a year.

By Wednesday 120,000 people had already registered interest in the sale n the Hargreaves Lansdown site alone.

Senior analyst Laith Khalaf said: “The tremendous level of interest in the Lloyds sale demonstrates how high profile offerings can really capture the public imagination, and get people thinking about investing for their future.”

The government has been selling down the taxpayer’s original 41per cent stake in Lloyds, recouping £15billion of its £20bn outlay, and now owns under 12 per cent. It is only offering £2bn to small investors – compared with £3.3bn in the Royal Mail sell-off – which represents only 3.6per cent of the bank.

But as with Royal Mail, the huge demand means only those applying for small amounts will be guaranteed to get them, in this case £1000 worth. But they will be offered at a five per cent discount to the market price at time of sale next spring, and buyers will be allocated another share for every 10 they hold providing they hang on for 12 months. The bonus share payout will be limited to a value of £200 per investor.

Mr Khalaf said: “Wild horses couldn’t drag investors away from this share sale, especially given the discounted price and the dividend stream Lloyds is expected to start churning out. Pensioners in particular are likely to respond to a trusted high street brand with a decent yield when interest rates are so low.”

He went on: “Based on £1,000 invested, an investor could expect a £50 price discount, an anticipated £50 dividend in 2016 (if the market price remains at today’s level at the time of the sale), and a further £100 in bonus shares a year down the line. Of course the dividend is not guaranteed, but that still looks like a pretty attractive package.”

It could amount to a 20per cent initial return, and investors could receive bonus shares up to an investment of £2000, assuming applications are not scaled back to £1000 or less.

Adrian Lowcock, head of investing at AXA Wealth, said: “For investments under £1,000 where the shares are held for 12 months the total discount to the market value at issue would actually be 15per cent, which is attractive. Given that it was taxpayers’ money that bailed out the bank in the financial crisis, this means that many households could share in the recovery of the company.”

Mr Lowcock said Lloyds shares gave investors exposure to the future growth of the UK economy, and the bank would benefit from interest rate rises through its mortgage businesses. “But it is sensitive to a drop in growth in the UK.”

James Box, banking analyst at wealth manager Brewin Dolphin, said: “If the share price, Lloyds’ operating profitability and the competitive environment remain constant between now and then, the retail offering could well be worth considering. Lloyds has the potential to be an income stock, which is a prospect that is not fully priced in at the moment.

“However, the merits of the public taking up the offer will depend on improved visibility around PPI claims and, most importantly, the prevailing share price. The offer is not good in itself just because there are sweeteners in terms of the 5per cent discount and bonus shares.”

The Wealth Management Association, representing 186 firms with four million clients and £670billion, has been campaigning for more share sales to be open to small investors, following disappointments such as the lock-out from the Virgin Money flotation.

Liz Field, chief executive, said: “We have been calling for the government to offer more shares to private investors during these sell-offs and the government appears to have listened on this occasion. The wider range of investors means that more people can hold management accountable for their decisions and it also means that people have a vested interest in seeing organisations like Lloyds succeed.”

Ms Field added: “There have been too many occasions in recent times when private investors have been excluded....we would encourage other companies, particularly those with a retail focus, to give private investors the opportunity to participate in their share offerings.

“Share ownership creates a public that is more actively engaged in the free-market economy and its success. We have been campaigning for a cultural shift in the UK towards investment and savings, and we will continue to do so as it would be a huge boost to the wealth of individuals, business and the national economy.”

Mr Khalaf added: “Lloyds is already the most popular share held by our clients who have taken advantage of the new pension freedoms to invest rather than buy an annuity. High profile public offerings like this one are also an effective way to get first-time investors to save for their future. When Royal Mail floated in 2013, more than a quarter of those who applied for shares said it was their first stock market investment.”

Lloyds has this year paid its first dividend since the bail-out, and is expected to

yield 3.5per cent this year and 5per cent in 2016. It paid a dividend of 0.75p last year - a far cry from its historic dividends of 34.2p a share in 2006, 35.9p in 2007, and 11.4p in 2008.