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NS&I Index linked savings certificates

2

Comments

  • jonni
    jonni Posts: 4 Newbie
    Part of the Furniture Combo Breaker
    BM Savings' 5 year inflation rate bond cash ISA offers RPI or 4.3% each year whichever is higher. That's where my ISA allowance is going this year. Should be on MSE's best buy list.
  • pqrdef
    pqrdef Posts: 4,552 Forumite
    jonni wrote: »
    BM Savings' 5 year inflation rate bond cash ISA offers RPI or 4.3% each year whichever is higher. That's where my ISA allowance is going this year. Should be on MSE's best buy list.
    Me too. But ILSCs are what we want to buy after maxing out the ISA allowance.
    "It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis
  • jonni wrote: »
    BM Savings' 5 year inflation rate bond cash ISA offers RPI or 4.3% each year whichever is higher. That's where my ISA allowance is going this year. Should be on MSE's best buy list.

    I don't really understand RPI. For 5 years would it not be better just to open the Halifax one paying 4.5%?
  • Masomnia
    Masomnia Posts: 19,506 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    pqrdef wrote: »
    Me too. But ILSCs are what we want to buy after maxing out the ISA allowance.

    If you've got that much disposable income, then you're not exactly a priority for the government right now. The government has a greater duty to tax payers: why should it borrow from you at 4% when it can borrow from the market at half that?
    “I could see that, if not actually disgruntled, he was far from being gruntled.” - P.G. Wodehouse
  • gadgetmind
    gadgetmind Posts: 11,130 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    pqrdef wrote: »
    Me too. But ILSCs are what we want to buy after maxing out the ISA allowance.

    I'm *very* glad we "backed up the truck" last summer and did max each plus another one each in trust. Lucky timing.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • SallyG
    SallyG Posts: 850 Forumite
    Are last year's 5 year NS&I tax free RPI indexed certs worth continuing to hold ?
  • pqrdef
    pqrdef Posts: 4,552 Forumite
    Masomnia wrote: »
    If you've got that much disposable income
    Income's got nothing to do with it. These things were Granny Bonds originally, and were invented so that people who have to live on their savings (which disqualify them from means-tested benefits) didn't have to worry about their savings being eaten away by inflation.

    The government could afford it because tax revenue automatically keeps pace with inflation.

    The impact on government borrowing costs is minimal. Last year's NS&I target was £2bn, which is a drop in the ocean compared to total Treasury borrowing.
    "It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis
  • lisyloo
    lisyloo Posts: 30,094 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    For 5 years would it not be better just to open the Halifax one paying 4.5%?

    Do you know what interest rates or savings rates re going to be in the next five years?
    No-one knows so a fixed rate is a gamble.
    Furthermore that's a ISA and some people will be looking for a home for their money after using their ISA allowance, so this option will not be open to them.
  • gadgetmind
    gadgetmind Posts: 11,130 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    lisyloo wrote: »
    Do you know what interest rates or savings rates re going to be in the next five years?

    Yup. I want most of my cash holdings to be index linked so as to preserve spending power.
    Furthermore that's a ISA and some people will be looking for a home for their money after using their ISA allowance, so this option will not be open to them.

    Yes, my ISA allowances are fully utilised with S&S ISAs.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • StevieJ
    StevieJ Posts: 20,174 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    Masomnia wrote: »
    If you've got that much disposable income, then you're not exactly a priority for the government right now. The government has a greater duty to tax payers: why should it borrow from you at 4% when it can borrow from the market at half that?

    In theory I would agree, but haven't they told us that inflation will be 2% soon :)
    'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher
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