NS&I certificates

Sceptic001

theapplefell wrote: »

The RPI figure for May and June remained constant at 235.2 so no interest will be added for that time period.

That is not really how it works. Index-linking is applied annually. So what matters is the annual rate of inflation, which fell from 5.2% to 5.0%. So the annual index-linked return on existing certificates will be 5.2% with an anniversary this month and 5% for existing certificates with an anniversary next month.

If you are planning on cashing unmatured certificates early then it is correct that you will not get any more by waiting until next month (except for 1/12th of the fixed element).

theapplefell

You're right Masomnia, the certificates are for the longer term.

I think the UK could get hit by a severe debt crisis in the next few years and the only way out will be to devalue the pound leading to much higher inflation.

dzug1

Sceptic001 wrote: »

Or they know that a large volume of fixed-rate bonds are maturing this year which will counteract the inflow from ILSCs...

They do tend to offer favourable renewal rates to maturing bond holders though

theapplefell

Sceptic001, that's true of course but people that have bought recently (like me) are off to a bad start

Sceptic001

theapplefell wrote: »

Sceptic001, that's true of course but people that have bought recently (like me) are off to a bad start

Well, look on the bright side. Massive increases in gas and elec bills will cheer you up when the August/September figures are published. (why isn't there a "confused" emoticon?)

The point of index-linking is to protect your savings against inflation. It is something of a circular argument to discuss whether price increases are good or bad. Comparison with other savings products suggests that ILSCs will remain a good deal until inflation falls and/or other savings rates rise significantly.

theapplefell

Did you see the smiley face at the end of my comment? A comment that was simply a courtesy response to your post. Also, there's no need to lecture on how the certificates work. The fact remains that RPI figure remained constant for May to June which was all I wanted to state.

Masomnia

theapplefell wrote: »

I think the UK could get hit by a severe debt crisis in the next few years and the only way out will be to devalue the pound leading to much higher inflation.

25% or something like that of the UK's public debt is index linked so I can't see that being a viable option.

Sceptic001

theapplefell wrote: »

Did you see the smiley face at the end of my comment?

I did.

theapplefell wrote: »

A comment that was simply a courtesy response to your post.

As indeed was mine to yours, with an additional point thrown in for good measure.

theapplefell wrote: »

Also, there's no need to lecture on how the certificates work. The fact remains that RPI figure remained constant for May to June which was all I wanted to state.

Your original point about the RPI figure remaining constant was factually correct, but your inference about its impact on ILSCs could have been misunderstood. Sorry if my original reply came across as a lecture, but there has been much misunderstanding on this forum about how ILSCs work. I was merely trying to ensure that there is no more confusion.

theapplefell

No problem Sceptic001- I've not posted much here so wasn't aware of past misunderstandings with the ILSCs Cheers

fireice

Can you add to inflation linked savings certificates after you have opened them?

eg If I put £1000 in one now can I add another x amount at a later date?