NS&I Guaranteed Equity Bond

Paul_Herring

They had that warning about inflation in the mail out at the start of last month.

ED

Required to make the declaration, I guess. Weird NS&I went ahead with a mailshot today of all days, with Inflation being so prominent in the news.

Paul_Herring - Do you reckon Index Linked Savings Certificates are a much safer offering from NS&I? As a 3-year commitment they seem attractive because of the tax-free status.

Paul_Herring

ED wrote: »

Weird NS&I went ahead with a mailshot today of all days, with Inflation being so prominent in the news.

The issue closes next Tuesday - they're trying to get as many people signing up before then as possible.

Do you reckon Index Linked Savings Certificates are a much safer offering from NS&I? As a 3-year commitment they seem attractive because of the tax-free status.

I'd do it only if I'd exhausted my other tax free options - cash ISA's for instance.

http://www.nsandi.com/products/ilsc/index.jsp would seem to suggest that the most they'll pay is 5.75%; there are cash ISA's out there paying more than that.

And I assume any increase in RPI would eventually result in an increase in ISA interest rates (well the better payers anyway.)

jamesd

Assuming 4% RPI inflation for 5 years you'll need to make a total of 22% to cover it. If you get half of the FTSE100 that means that before tax you're betting on an 18% rise in the price of the hundred largest UK companies over 5 years to break even after inflation. Basic rate tax payers are betting on 23% and higher rate on 31%.

The index-linked savings certificates with no tax seem like a better bet, particularly for higher rate tax payers.

Paul_Herring

Another bump. This time it's "This Is Money" pushing GEB's (albeit with a rider saying NS&I's are crap.)

http://www.thisismoney.co.uk/saving-and-banking/article.html?in_article_id=429782&in_page_id=7&ito=1565


Hmm - nearly a year since NS&I pushed theirs - wonder if we're due for another influx of advertising...