Inflation Linked Savings discussion area

Ark_Welder

suelees1 wrote: »

Their letter only mentions another 3 year term

You should find the option of investing for another term described on the reverse side of the letter. Basically, stating that the appropriate section of the enclosed form needs to be filled and returned.

suelees1

Oh aye so it does, thanks very much. I hadn't looked through the form . There's a blank box to complete with whatever different term I chose but also says it can't guarantee the rates of interest given but that they'll give the issue(s) available on the day of renewal.

All seems a bit vague.

s20544

Any thoughts on whether it is currently better to renew for 3 years or 5 years? (both at RPI + 0.15%)

Glen_Clark

s20544 wrote: »

Any thoughts on whether it is currently better to renew for 3 years or 5 years? (both at RPI + 0.15%)

If you are not very likely to need the money for 5 years, I suggest 5, because I doubt if you will get a better offer after 3. Based on the fact they are already selling certificates at lower than RPI.
What makes these certificates particularly good value is their link to RPI, (not the more fiddled CPI which Osborne has been forcing on to the likes of benefit claimants)
RPI includes mortgage interest payments, so when interest rates rise, so will the interest on these certificates

s20544

Glen_Clark wrote: »

If you are not very likely to need the money for 5 years, I suggest 5, because I doubt if you will get a better offer after 3. Based on the fact they are already selling certificates at lower than RPI.

I was not aware that NS&I are now selling index linked saving certificates at less than RPI!!??

Glen_Clark

s20544 wrote: »

I was not aware that NS&I are now selling index linked saving certificates at less than RPI!!??

Not NS&I but according to the FT last week the UK Government auctioned 50 year Index linked certificates at face value less 1.26%. - for every pound you get an index linked 98.74p in 50 years time - if the Government hasn't gone bust
That shows how expensive inflation protection has become on the open market, and why these retail bonds are such a good deal.

(Like ISA's, the Government are doing them for political reasons. If every saver was being robbed by tax and inflation they would lose too many votes. ISAs & index linked certificates are an option that protects most of the voters who are concerned enough about it to open them)

kar999

Glen_Clark wrote: »

(Like ISA's, the Government are doing them for political reasons. If every saver was being robbed by tax and inflation they would lose too many votes. ISAs & index linked certificates are an option that protects most of the voters who are concerned enough about it to open them)

Perhaps ... but I suspect they would get even more votes from hard up savers if they reintroduced new issues of Index Linked Certs instead of confirming there wont be any on sale this tax year!!

kidmugsy

Glen_Clark wrote: »

last week the UK Government auctioned 50 year Index linked certificates at face value less 1.26%. - for every pound you get an index linked 98.74p in 50 years time

You mean Index-Linked Bonds.

s20544

On the topic of renewing NS&I Index Linked Savings Certificates (RPI+0.15%) for either 3 yr or 5yr . . . .

Do you think these certificates will be on sale in 3 years time?

If they are on sale, do you think their rate will be higher or lower than RPI+0.15% in 3 years from now?

(I know these are crystal ball type questions but it would be useful for me to know if the majority of people think each case is likely or unlikely)

Thanks for your views

suelees1

Yesterday I decided to renew/extend mine for the full 5 years. For the past few years I've been loathe to opt for a 5 year fixed rate, laughingly believing interest rates would increase and I'd be stuck with a lowish rate. However as we all know things haven't improved and now interest rates seem to be at an all time low so I decided the 5 year option looks the best option.