Protecting Against Inflation

ThrowingStonesAtYou

If I want to protect the value of my savings in real terms, what's the best way to go about this? Can it be done by simply putting money into one of the RPI-linked bonds that NS&I offer?

Are there are good,cheap and easy ways to do this by putting money into other low-risk investments?

RayWolfe

If you think your personal inflation is the same as RPI, then there can be no better method than NS&I. You are limited to £15K per issue.

Reaper

The other way is to simply put it in savings accounts that pay more than inflation of which there a multitude around right now paying a lot more than NS&I. Of course you have to keep an eye on them and move the money when the rate becomes uncompetitive.

If you don't feel like putting the effort in, have over £25k and don't mind giving 3 months notice to withdraw look at the Investec High 5 which is always competitive because it pays the average of the top 5 competitors (and check out the referral board for an introductory bonus).

However these strategies won't work if inflation shoots up and interest rates don't follow. There is a risk of regreting your choice whatever you do.

ThrowingStonesAtYou

Thanks for the responses guys. Are NS&I index linked bonds always on sale - e.g if inflation was to shoot up and they became very popular could they be pulled for new customers?

Reaper

It is always possible but unlikely in my opinion. More likely is that terms will change for new issues, becoming more or less than the current issue (which I think is RPI+1% from memory).