MSE News: NS&I revives inflation-beating savings certificates

Rollinghome

The RPI figure for April, announced today is 234.4, up from 232.5 in March. So for those who have applied this month, for whom the reference start date will be March, that's an increase of 0.82%. If that was the same every month would add to around 10%! Interesting thought even if very unlikely, around half that might be more realistic.

(Not sure if it's the right way of looking at it but probably better than finding the month on month figure hasn't gone down after you'd invested as happened a couple of years ago.)

afwone

KTF wrote: »

For those who are wondering when the money gets taken. I applied Thursday, the money was 'reserved' all weekend and the balance was correct this morning.

My experience too.

I applied Thursday morning online, and the funds for this left my account last night. My online current account doesn't tell me anything about money being 'reserved', just that the money is there or not there. This morning it is the latter.

Reading this thread, one can see why NS&I have been a little slower than usual in processing payments...

artha

KTF wrote: »

For those who are wondering when the money gets taken. I applied Thursday, the money was 'reserved' all weekend and the balance was correct this morning.

I applied for 10k on Thursday + 5K on friday. Funds became reserved (i.e not included in my available balance) over the weekend but have not yet been taken. OH did the same and is in the same position.

JamesU

Rollinghome wrote: »

The RPI figure for April, announced today is 234.4, up from 232.5 in March. So for those who have applied this month, for whom the reference start date will be March, that's an increase of 0.82%. If that was the same every month would add to around 10%! Interesting thought even if very unlikely, around half that might be more realistic.

(Not sure if it's the right way of looking at it but probably better than finding the month on month figure hasn't gone down after you'd invested as happened a couple of years ago.)

Bit misleading though because the mth/mth RPI does not increase equally at the same rate each month. If it did, there would no variation in %RPI/ILC returns each month over a 12mth period. So far this year the mth/mth RPI variations are 0.3%, 1%, 0.5%, 0.8%. But that does have implications, see posts #142 and #204.

JamesU

Rollinghome

JamesU wrote: »

Bit misleading though because the mth/mth RPI does not increase equally at the same rate each month. If it did, there would no variation in %RPI/ILC returns each month over a 12mth period. So far this year the mth/mth RPI variations are 0.3%, 1%, 0.5%, 0.8%. But that does have implications, see posts #142 and #204.

JamesU

Well it was intended tongue in cheek really which is why I included the exclamation mark followed by saying that it was "very unlikely and around half that might be more realistic".

The truth is that no-one knows what inflation will be over the next year let alone the next 5 years which is why all the hype about returns of 9% based on the past 12 months is so much nonsense.

PS, Sorry I hadn't read your earlier post. Yes it was a very good barbie, wonderful what you can achieve by starting early. Was a bit grumpy on Monday though.

JamesU

Rollinghome wrote: »

Well it was intended tongue in cheek really which is why I included the exclamation mark followed by saying that it was "very unlikely and around half that might be more realistic".

The truth is that no-one knows what inflation will be over the next year let alone the next 5 years which is why all the hype about returns of 9% based on the past 12 months is so much nonsense.

Sorry, meant the figures as presented could mislead some OPs less familiar with ILCs. Fully understand it was tongue and cheek on your side! And for sure, nobody knows what inflation will be over the next 12mths.

JamesU

Rollinghome

JamesU wrote: »

Sorry, meant the figures as presented could mislead some OPs less familiar with ILCs. Fully understand it was tongue and cheek on your side!

You're quite right, I shouldn't be spreading even more confusion than there already is. TiM have already done enough of that.

There's a more grounded assessment than some by Justin Modray from Saturday's Money Box at http://www.bbc.co.uk/iplayer/episode/b011290l/Money_Box_14_05_2011/

JamesU wrote: »

But outside of a deflationary period RPI generally increases (often with exceptions in January and July for reasons I do not understand).

I've always assumed that's due to the January sales and post Xmas food prices. Similary for July and when energy companies reduce their tarifs based on oil prices they tend to do so in the summer. The restoration of the 17.5% VAT rate then the increase to 20% this January upset that pattern. I'd agreed that a month on month fall in the index currently looks unlikely for a while.

I'm not overly convinced by the frequent suggestions that this ILC issue is likely to to be quickly pulled. NS&I have repeatedly said they have factored in the anticipated huge demand and intend it to be on offer for some time. Would be politically embarrassing if they have got their calculations very wrong. I maxed out all four issues on offer in 2010 for myself and wife so probably won't be in the queue this time and will be many others in the same position.

lisyloo

I maxed out all four issues on offer in 2010 for myself and wife so probably won't be in the queue this time and will be many others in the same position.

Well apart from my job being at risk (very short term), we also maxed out cash ISAs in April, so we don't have a huge amount of spare cash right now.
I also maxed out on NSI in 2010 (not on the allowances, on the spare cash I had).
So I think you are right, there aren't loads of people sitting on loads of spare cash right now.
Assuming my job situation sorts itself out then I would buy some each month with any savings I have, so it's more of a steady stream.

Consumerist

typistretired wrote: »

On hindsight I should have just made one lump sum application the people on this forum who advised splitting the applications must already have NS&I Savings Certificates and Customer Numbers. . . meanwhile I have lost interest letting the funds for the 2 subsequent applications lie in my current account.

But there have also been reports of banks declining £15K payments so you could have had the whole £15K sitting in a current account.

Rollinghome

lisyloo wrote: »

Well apart from my job being at risk (very short term), we also maxed out cash ISAs in April, so we don't have a huge amount of spare cash right now.
I also maxed out on NSI in 2010 (not on the allowances, on the spare cash I had).
So I think you are right, there aren't loads of people sitting on loads of spare cash right now.
Assuming my job situation sorts itself out then I would buy some each month with any savings I have, so it's more of a steady stream.

I've lost track of the number of friends whose job is "under review" mostly in local gov or companies supporting them, including one who was made redundant then walked into a much better job. So could well be a factor.

Anxious time but I hope it all goes well for you.