Post office inflation beating bond or other option?

jabbahut40

I was lucky enough to save some money in the last NS&I index linked saving option earlier this year and am now looking at the Post Office index linked bond (3 or 5 year options). I am aware that this account requires tax to be payed on any interest earned and is locked for the full term.

Is it worth opening the PO account, waiting for the next NS&I offering (hopefully early next year) or sticking with a cash ISA? I already have other savings that are instant access and am prepared to sacrifice access for a better return. Comments welcomed.

Jabba

MoneySaverLog

Surely RPI has to fall at somepoint, and interest rates go back up. All this printing of money is doing my head in.

Ifts

There are a few of these inflation beating bonds on the market from different financial institutions, but unlike the NS&i ones these are taxable.

I was reading this article a few days ago, may be of interest to you:

http://www.thisismoney.co.uk/money/saving/article-2050576/How-beat-inflation-Six-savings-accounts-maintain-spending-power.html

opinions4u

If you're prepared to tie the money up (accessible with a penalty) then BM offer an index linked cash ISA thingy that's tax free.

http://www.bmsavings.co.uk/savings/index-linked-savings/

jabbahut40

Hi All, many thanks for the above responses. Any opinions on when the next NS&I issue will be available and whether it is worth sticking cash into a cash ISA and wait as a short term option?

Jabba

le_loup

It's only an opinion ... not until after the start of the new tax year.

lisyloo

Personally I think RPI will go down. Obviously I don't exactly when and how much but certainly within 5 years.
I like NSI because of the lack of a tie-in (I know you wouldn't get any return in the first 12 months).
I'm keeping my money on the sidelines for now. It's only 5 months until the next tax year.

jabbahut40

Thanks for the feedback. I reckon I will stick with a cash isa for now and see what happens with RPI and further NS&I issues (if any) in the new year...

Jabba

slinga

Unless the next NS&I comes up with RPI + 1.25%, unlikely I think, then shewerly the Post Office Index linked Bond and the BM index linked thingies are exactly the same as the NS&I but have better +%ages.

I can't see any reason to wait until something is released which is likely to not be as good as what is available now.

Pleas enlighten me.

ctdctd

slinga wrote: »

Unless the next NS&I comes up with RPI + 1.25%, unlikely I think, then shewerly the Post Office Index linked Bond and the BM index linked thingies are exactly the same as the NS&I but have better +%ages.

I can't see any reason to wait until something is released which is likely to not be as good as what is available now.

Pleas enlighten me.

NS&I is tax free, Post Office is not. You get taxed on the whole return, not just the RPI bit.

oldvicar

NS&I is 100% backed by HMT. Post Office is not.