NS&I Index-Linked Savings: Q&A

Sceptic001

musehead is absolutely right. If the RPI figure falls in any given month (as it did this month) then the value of the ILSC will fall relative to the previous month, unless it is an anniversary revaluation month.

hallmark

Sceptic001 wrote: »

musehead is absolutely right. If the RPI figure falls in any given month (as it did this month) then the value of the ILSC will fall relative to the previous month, unless it is an anniversary revaluation month.

This is 100% not how it's worked in the past. I've just checked back on the valuations each month going back to January 2009 (I noted them down in Excel) for the ILSC I bought in 2007.

The RPI figure fell from Feb 2009 to Mar 2009 & again from Dec 2009 to Jan 2010. However in both instances the value of the holdings I hold increased. To cite just one example, a £15,000 holding purchased in March 2007 was valued at £15,940.50 on 20/02/2009 & £16,059.00 on 20/03/2009.

As I said, I've been checking the value of these using the NSAND Calc for the last 40+ months & the value has only ever increased, even if the RPI figure falls.

Miss.Moneypenny_3

I agree with hallmark.
I have never seen the value drop before.
There must be errors with the spreadsheets the calculator uses (it's happend before).;)
Or they could have started using CPI instead of RPI. :eek::eek:

Biggles

I've not seen the value of mine drop before, but then I bought in Mar & Apr 09, and this is the first time the RPI has dropped in that time (Hurrah!!) (apart from 0.1% in Jan 10).

But surely you must have seen the value drop between Sep 08 and Jan 09, when it dropped every month, going from 218.4 down to 210.1??

hallmark

Miss.Moneypenny wrote: »

I agree with hallmark.
I have never seen the value drop before.
There must be errors with the spreadsheets the calculator uses (it's happend before).;)

That's what I think too. For a start, by the logic above, if RPI fell again next month, the tranche I bought this year would be showing a value less than I paid for them.

Although like I say, the formula for these seems deceptively complicated & my main reason for being convinced there is something up is that I know for a fact the value has never reduced before (at least not in the last 3+ years).

Sceptic001

Miss.Moneypenny wrote: »

There must be errors with the spreadsheets the calculator uses (it's happend before).;)

Yes, that is plausible. I am surprised that it gives a value for ILSCs held for less than a year, which are actually worth face value only.

Miss.Moneypenny wrote: »

Or they could have started using CPI instead of RPI. :eek::eek:

No. They can't change the T&Cs of existing certificates and have said that they have "no plans" to switch to CPI for future issues (although when politicians say "no plans" it is usually code for "we haven't got the guts to tell you yet").

alanq

Sceptic001 wrote: »

I am surprised that it gives a value for ILSCs held for less than a year, which are actually worth face value only.

... unless they were obtained by reinvesting matured certificates in which case their value is adjusted for RPI each month.

musehead

Why are you recording the monthly valuation anyway? Only the yearly anniversary matters. The monthly (however it is worked out) beans no relation to the actual return you'll receive.

StevieJ

musehead wrote: »

Why are you recording the monthly valuation anyway? Only the yearly anniversary matters. The monthly (however it is worked out) beans no relation to the actual return you'll receive.

Why not? you might cash it in early (but after the first year) then it will be calculated on a monthly basis.

musehead

Yes that's true, it's only the first year where it doesn't make sense.