National Savings - Inflation Proofing.

6022tivo

Hello

A while back I had to get some tax free savings, so I went for some NS&I tracking things.

Anyway, it is due to mature, and I am happy with the gains. But they are offering me to continue with this new thing called "Inflation Proofing +1%" over the three year term...

What to do, I don't have to worry about tax free anymore, and was thinking of topping up my Zopa instead?? I don't understand the term "inflation proofing"???

Any ideas guys and gals.?

CLAPTON

bit their hand off

dzug1

You'll get interest of whatever index they are tracking (RPI, CPI?) plus an additional 1%

Cautious_Investor_3

Hi

This sounds like an excellent deal to me, 1% plus inflation (this used to be RPI, I don't know whether the 'roll over' is !% plus RPI or CPI) is really good value in the current market place if you believe inflation will continue to rise, or even stay where it is at the moment.

And remember, the interest is not liable for tax.

Just a shame NS&I do not currently offer these to new customers.

The Cautious Investor

MyRubyRed

6022tivo wrote: »

Hello

A while back I had to get some tax free savings, so I went for some NS&I tracking things.

Anyway, it is due to mature, and I am happy with the gains. But they are offering me to continue with this new thing called "Inflation Proofing +1%" over the three year term...

What to do, I don't have to worry about tax free anymore, and was thinking of topping up my Zopa instead?? I don't understand the term "inflation proofing"???

Any ideas guys and gals.?

Exactly what product do you have? NS&I have a wide range of savings products on sale

Ripoff_2

You may want to read this and then consult an IFA if you have any doubts. This is information and not investment advice.

Protect Your Wealth

Inflation is a stealth tax that is being used by the Government and the Bank
of England to a. Reduce the budget deficit (eroding purchasing power), and
b. funneling tax payers and savers cash onto the balance sheets of the
bailed out banks as savers are in receipt of interest net of tax at half the
CPI rate and similarly average workers pay rise is near half the CPI and far
below the RPI inflation measure of 4.7%.

At the end of the day savings/ capital taxes PLUS inflation are a means of
taking accumulated wealth from the haves and redistributing to the have
not's. Over the long run inflation ensures that those with accumulated
wealth will ultimately lose most of it to the state (unless their funds are
protected against UK inflation and taxation).

Unfortunately the coalition government has accelerated the trend of stealth
theft by withdrawing the National Savings Index Linked Certificates in June,
that allowed the people of Britain to at least protect upto £15,000 (per
issue) of their life time accumulated savings against RPI. Whilst also
declaring a switch in annual indexation from RPI to CPI which means under
reporting UK inflation by 1.5% against RPI and 3% against real UK inflation
(6.2%).

The Bank of England is going to keep printing money which is a positive for
asset prices such as stocks. For investors the strategy remains to invest in
inflation wealth protection and growth such as agricultural commodities,
gold, silver, metals and mining, TIPS, emerging economies such as China,
India, Russia, Chile, Brazil, and developed economies such as Australia and
Canada as their appreciating currencies will protect your investments
purchasing power in sterling.

This was extracted from [URL="mhtml:{6EF71D81-FCE8-447B-947D-380BDD9A9C3B}mid://00000064/!x-usc:http://www.marketoracle.co.uk/Article25806.html"]http://www.marketoracle.co.uk/Article25806.html[/URL] a
very interesting read indeed.

6022tivo

So, cash them in and buy gold?

Sceptic001

6022tivo wrote: »

So, cash them in and buy gold?

If you do that you are passing up the only opportunity currently available to savers to protect their savings against inflation as measured by RPI. Most savers would give their eye teeth for such an opportunity... but the gold bugs on here will applaud you!

6022tivo

Sceptic001 wrote: »

If you do that you are passing up the only opportunity currently available to savers to protect their savings against inflation as measured by RPI. Most savers would give their eye teeth for such an opportunity... but the gold bugs on here will applaud you!

I don't think it is RPI.

It was, and I made a couple of grand (Had RPI + 1.3% for 5 years)

This is now renamed as inflation busting???? Not RPI??

Sceptic001

6022tivo wrote: »

I don't think it is RPI.

It was, and I made a couple of grand (Had RPI + 1.3% for 5 years)

This is now renamed as inflation busting???? Not RPI??

The correct name is Index-linked savings certificates. It is not a new product. "Inflation-busting" means that the return exceeds inflation by the amount of the bonus, which is currently 1% AER (all tax-free). The inflation measure remains RPI and NS&I have stated that they have no plans to change this. Even if they did change it would not affect existing certificates.

With retail price inflation currently 4.8% and rising, if ever there was a no-brainer decision, this is it, but I suppose if you take your money out it may marginally hasten the day that NS&I brings back this product for the rest of us. :j

Cautious_Investor_3

Ripoff wrote: »

The Bank of England is going to keep printing money which is a positive for
asset prices such as stocks.

Hmmm, the MPC have consistantly voted against further QE over the past few months, the rising CPi and RPi figures also make additional QE unlikely for the time being.

The Cautious Investor