National Savings, Index Linked Savings Certificates

flobbalob

Lansdowne wrote: »

You get no interest at all if you cash in within a year of making your investment, you just get your money back.

It appears you actualy get your money back plus the interest (currently 1%) on top, as discussed here

http://forums.moneysavingexpert.com/showthread.html?p=15417593

soulsaver

trenchwars wrote: »

There are index-linked ISAs such as this one that work similarly to ILSCs, which you could transfer your ISA into:

http://www.leedsbuildingsociety.co.uk/savings/inflation_buster_isa.html

This account actually pays a better rate than NS&I certificates. One potential problem is that the term of the account only lasts one year whereas you can get 5 year NS&I savings certificates.

Sorry to correct you but the account lasts 2 years - and Issue 6 (October) was for rpi + 2.5%.. issue 7 RPI + 1.8% However I note that Issue 7 has the caveat that in the unlikely event that RPI goes negative the 1.8 is reduced and can go to nil but won't go beyond & affect your capitol. Overall it looked good to me.
l also like ILSC for safety, and cos its tax free helps keep me away from the 40% Tax zone. However falling savings rates is likely to do that for me too:(

The only issue I have with RPI based savings is (call me cynical..) I believe that HMG 'fiddles' RPI to avoid the HUGE Treasury costs associated with high RPI and the public sectors inflation proofed pensions...

nicko33

flobbalob wrote: »

It appears you actualy get your money back plus the interest (currently 1%) on top, as discussed here

http://forums.moneysavingexpert.com/showthread.html?p=15417593

No, that thread was saying that if there was deflation, you still get the interest. If there is deflation, you get 0% for the Index-Linking, but you still get the Interest.


If you cash in before the first anniversary, you get neither Index-Linking nor Interest.

T&C
6. Index-linking and interest will be earned, from the date of purchase, as follows:
(a) for Reinvestment Certificates, each complete month held;
(b) for other Certificates, each complete month held, but no index-linking or interest will be earned in respect of such a Certificate which is cashed in before the first anniversary date.

poppy10_2

RPI down to below CPI now - down from 5% to 4.2% :eek:

Merv King says it will go negative next year:eek::eek:

Oh Noes!!! :eek::eek::eek:

Looter

I put 15k in the NS&I 5yr ILSC at the end of Aug - I'm wondering if I should cash in and look for something else, any decent long term alternatives out there? I've tried savings comparison sites but when you click on a product it's already obsolete!

poppy10_2

To be honest, with NSI you get a rock solid guarantee that your savings will be safe. Plus 1% on top of RPI, whatever that is - if it does go negative you will still get paid a minimum of 1%.

Remember if RPI does drop or go negative, you won't have lost out, as things will cost less and the purchasing power of your money will have gone up, even if the amount of money hasn't increased as much as you would like. For a higher rate tax payer I'd say it still makes sense - if base rates are cut further as expected, you'll sturggle to find a safe account that will pay you more net than the ILSC.

LesU

I've just completed my financial planning for next year and I do wonder what planet Mervyn King and the rest are living on.
Electric, Gas, Water, Insurance (Home & Car), Fuel, Road Tax, TV licence, Sky Subs are all guaranteed to be between 5 to 30% more than what they cost last year. I can't say that Council Tax costs won't plummet, but it seems unlikely. We know that train fares are going to be set above inflation and if I want to drive to Bluewater Mall in Kent, the local council has just put up the Dartford crossing fee by 50%, despite the bridge having been paid for twice over.
So where is this deflation coming from? Fuel won't keep on reducing in price, once OPEC gets its act together. I guess Tesco will be giving all of their food away to get inflation down - fat chance!
If inflation this time next year is negative it will be the biggest con job played on the public in living memory.
I'm definitely going to investigate these inflation linked bonds, at least for 1 or 2 years, if they are still available.

miserable_ol_so_n_so

LesU wrote: »

I've just completed my financial planning for next year and I do wonder what planet Mervyn King and the rest are living on.
Electric, Gas, Water, Insurance (Home & Car), Fuel, Road Tax, TV licence, Sky Subs are all guaranteed to be between 5 to 30% more than what they cost last year. I can't say that Council Tax costs won't plummet, but it seems unlikely. We know that train fares are going to be set above inflation and if I want to drive to Bluewater Mall in Kent, the local council has just put up the Dartford crossing fee by 50%, despite the bridge having been paid for twice over.
So where is this deflation coming from? Fuel won't keep on reducing in price, once OPEC gets its act together. I guess Tesco will be giving all of their food away to get inflation down - fat chance!
If inflation this time next year is negative it will be the biggest con job played on the :rotfl:public in living memory.
I'm definitely going to investigate these inflation linked bonds, at least for 1 or 2 years, if they are still available.

I agree with you completely re which planet these prdictors of low inflation reside....but they are right.....after all, the sort bof goods they include in calculating price movements.......they include items such as DVD players etc.....which we know are falling and have been falling......in fact it wont be long before such items will be included in your packets of cornflakes...so you see, the CPI and RPI numbers WILL BE LOWER!...hence their argument to drop interest rates further. And does anyone think fuel/energy will come down?.....think again....with the pound falling against the dollar....petrol at the pumps will rise and rise...only a matter of time.....

poppy10_2

miserable_ol_so_n_so wrote: »

does anyone think fuel/energy will come down?.

But they promised!
http://www.mirror.co.uk/advice/money/2008/11/18/customers-promised-cheaper-fuel-bills-in-new-year-115875-20904246/

[Deleted User]

Is the online calculator being accurate at the moment? It is now saying terms of 2,3 or 5 years and my certs have been calculated at being worth less than last month. I think there is a glitch