Inflation Linked Savings discussion area

edward123

I will be taking up the latest offer of RPI + 0.15%. The amount will only be £3465 and being tax free it simply gives me a little money I will not need for the next 3 years and will be worth more as its inflation proof. I have other index linked certs and they both 'mature' next year and whether I renew them then all depends on the RPI + %, if offered.

Glen_Clark

Definately hang on to them if you can.
Look at what is on offer to new investors.
Every index linked bond has a negative yield - that is guaranteed to lose money in real terms if kept until redemption - even if the Government does't go bust before then. But people are still buying them - showing how desperate investors are to avoid inflation.
see link to prices - look at the yield in the last column: http://www.fixedincomeinvestor.co.uk/x/bondtable.html?groupid=3530

Nicholas-bloody-Parsons

"Inflation has exceeded the BOE's target for four of the last five years, and is projected to remain above the 2% threshold for three more years" (New York Times)

The BoE is to switch its focus from inflation to growth.

Pretty safe bet in my book, until at least 2016.

Gaaraz

The website isn't very clear, just to be sure can I definitely renew after my 5 years is up? Thank you

Glen_Clark

Gaaraz wrote: »

The website isn't very clear, just to be sure can I definitely renew after my 5 years is up? Thank you

At the moment Yes - They will write to you a couple of months before the time explaining your options. The best course of action is usually to do nothing - then it will renew automatically into another index linked bond
Its not likely to be as good as the one you have got now but better than that on offer to new investors

kar999

Sadly I've had to cash in Mrs Kar's as we needed funds but she is a non-taxpayer so it wasn't so painful as she still has some other bonds paying 5+% gross for another couple of years.

I'm keeping mine though as like others have said I can't see RPI inflation falling much below 3% in the next few years.

redbuzzard

I assume the renewal offers are still RPI linked? ONS seems to be in the process of demoting RPI from being an official national statistic, which makes me think that NSI might move to CPI for indexing at some point.

Shades of Argentina.

http://www.nasdaq.com/article/argentina-says-inflation-at-111-economists-say-its-26-20130215-00757

suelees1

So have I got this right please.....?

Index linked investment (issue 20) matures soon. Deposited £10K 3 yrs ago and now (at Jan's RPI) = £11574.

I can chose to renew it for another 3 years earning 0.15% in addition to index linking.

At this point it's extremely unlikely the money will be desperately needed so assume it'd be sensible to let it run on for a further term?
:undecided

Many thanks

kidmugsy

suelees1 wrote: »

Index linked investment (issue 20) matures soon. Deposited £10K 3 yrs ago and now (at Jan's RPI) = £11574.

I can chose to renew it for another 3 years earning 0.15% in addition to index linking.

I expect that they'll also let you choose a 5 year certificate instead if you'd like. They certainly used to give such a choice.

suelees1

kidmugsy wrote: »

I expect that they'll also let you choose a 5 year certificate instead if you'd like. They certainly used to give such a choice.

Their letter only mentions another 3 year term