NS&I Index linked certificates to be introduced next FY

le_loup

Conspiracy theories flourish on the Internet, don't they?
Do you not believe they could have run out of need and for the coming financial year they have a need?
Why would you want out government to take in borrowings that they do not need or can get cheaper?
NS&I are not there for our benefit.

alanq

If demand is likely to exceed target one option that has not been used for many years would be to restrict the amount that can be placed in reinvestment certificates. Once upon a time you could invest say up to £10,000 and in addition reinvest up to a further £10,000 in any one issue. It is only relatively recently that reinvestment was unlimited.

Let's hope that they come up with something better than filling their quota in a couple of months and withdrawing ILSC altogether for the rest of the year.

sabretoothtigger

I think thery won't bring it in until they think RPI has peaked

Its a loan to government and this government is running a deficit. Its not done out of choice or to scam anyone. This latest budget was fancy juggling that has not reduced the finance needs of HMG so in one way or another they will be going out there and asking for money including this it seems

Masomnia

StevieJ wrote: »

I think Masomnia provided the logic.

*Educated guess

Masomnia

whu wrote: »

I think thery won't bring it in until they think RPI has peaked

If you take out VAT then inflation by CPI is 2.7%, so RPI a bit higher. So between now and the next few years inflation is gong to be lower than it looks to be now. They can anncunce it now because they know the situation re VAT.

In fact if they cut VAT in the next few years these certficates could become a bad deal with a year.

alanq

Masomnia wrote: »

In fact if they cut VAT in the next few years these certficates could become a bad deal with a year.

The VAT increase will come out of the calculation in January 2012 but the budget moved a fuel duty increase that was due to be applied in April to January 2012 with a further rise in August 2012.

If ILSC become a "bad deal" then they can be cashed in. I cashed in some ILSC during a period when they were "a bad deal" never dreaming that it would be impossible to invest in new certificates in a later year. I now regret taking a short term view.

david78

I used my ILSCs as a sort of additional cash ISA allowance and was gutted when the stopped providing any issues.

Do we know when exactly they are coming back?

StevieJ

Masomnia wrote: »

If you take out VAT then inflation by CPI is 2.7%, so RPI a bit higher. So between now and the next few years inflation is gong to be lower than it looks to be now. They can anncunce it now because they know the situation re VAT.

In fact if they cut VAT in the next few years these certficates could become a bad deal with a year.

The four year fixed ISA at the Halifax is looking good then 4.4%.

lisyloo

The four year fixed ISA at the Halifax is looking good then 4.4%.

Personally I wouldn't say so.
But then I would be comparing with variable rates and looking for access, not comparing with inflation and looking to tie-in, so what is "good" depends on what you are looking for.
I'd exect rate to rise more than 1.4% ovr 4 years personally, but that's just an opinion.

Rollinghome

From NS&I http://www.nsandi.com/nsi-2010-11-quarter-3-financial-report :

"2011-12 Net Financing target

As confirmed in the Debt Reserves Management report, issued today, NS&I’s target for Net Financing for 2011-12 is £2 billion in a range of £0 billion to £4 billion. This positive Net Financing target will allow NS&I to plan the re-introduction of Savings Certificates for general sale in due course. Currently only savers with maturing investments in Savings Certificates can continue to rollover their investments for a further term. Subject to market conditions, NS&I expect to be bringing Savings Certificates back on general sale in 2011/12.

NS&I can also confirm that a new issue of Index-linked Savings Certificates will retain index-linking against the retail prices index (RPI)."