Index linked savings

redb_2

Now that National savings index linked products have gone, what are the options to replace them with ? Looking at index linked ETF ...

on the one hand we have moneyweek saying dont buy
http://www.moneyweek.com/investments/funds-index-linked-gilts-look-too-expensive-49229.aspx

and on the other the guardian says buy
http://www.guardian.co.uk/money/2010/aug/14/safe-investments-to-beat-inflation

any comments on who is right

thanks
red

Reaper

I'm a bit confused by the Guardian article. It talks about protecting yourself against high inflation but then starts talking about corporate bonds which surely suffer during times of high inflation?

Anyway rather than answer your question here is a 3rd choice!
http://www.moneysavingexpert.com/news/banking/2010/08/the-return-of-inflation-beating-savings?utm_source=forum&utm_medium=sidebar&utm_campaign=box

D1zzy

.............and throw into the mix the half "the experts" are predicting deflation.....................

DiggerUK

Reaper wrote: »

I'm a bit confused by the Guardian article.........

At first glance the Guardian article seems to be making recommendations, point of fact is, it is basically an info, not an advisory piece.
But it does lead by the nose somewhat.
You need to have 't&c small print glasses ' on, when reading it.

Redb, in the good old days opinions were 10 a penny, in the age of the web they are 100 a penny, and getting cheaper.
At the end of the day you have to DYOR, you have to make the call.
Spooky huh!..

Best of fortune.

purch

Index Linked Gilts are relatively expensive, and have been for quite a while. To get value out of them, you would need an Inflation rate higher than currently for an extended period.

On that basis the Moneyweek article is quite correct.

In order to get the full Index Link protection you would need to hold the Gilts directly rather than an ETF. The value of the ETF will fluctuate far more as it will be tracking the price of the paper.

Jonbvn

NCBS have just introduced a new index linked cash ISA account.

http://www.ncbs.co.uk/savings/savings/tax-free/2nd-Issue-Index-Linked-Cash-ISA.aspx

http://www.telegraph.co.uk/finance/personalfinance/savings/7948100/Index-linked-savings-make-a-comeback.html