NSANDI saving certificates

grey_gym_sock

richyg wrote: »

Grey gym sock,

I have never thought of it that way. I guess your saying is that NS&I Index linked are indeed a Government RPI guaranteed gilt. I assume noone outside of individuals with £15k are invested ? But I guess that exposure is still Billions.

by gilts, i meant government borrowing through tradeable securities (i.e. you can buy and sell the right to receive the future interest and the return of capital). the same point, that we collectively pay the interest, does apply to NS&I certificates (which are only available to individuals, and can't be traded). i just mentioned gilts because there's more money in them in total.

NS&I's site says that the total invested with them is nearly £100bn, but i'm not sure how much of that is in index-linked certificates.

there is a total of about £1,200bn in gilts (this is the form that most public sector borrowing takes), of which about £300bn is in index-linked gilts.

Im new to all this finance malarkey but interested in learning as i have no mortgage and £120,000 balanced in 22 ISA's earning an ever decreasing interest rate which is concerning me.

is some of that in S&S ISAs?

I also would like a low inflation environment but i assume all the QE or what I would call printing money must be supporting something, is this equities prices at the expense of inflation or am i too simpistic in that. Do you have any pointer to books for a beginner.

i think "printing money" is the right term ... of course, it's electronic money that's created, but nobody means it literally.

QE puzzles me, really, though i suspect it is supporting equity prices.

the returns on money on deposit are historically quite poor at the moment. no idea how long this will go on. the options are mainly either to live with that, or go for something potentially higher return but much more volatile (e.g. shares), or a mixture of the 2.

a mixture may be easier to live with. e.g. the stock market may crash, but if you're partly in cash, your total assets fall by a smaller percentage. or your cash holding are gradually falling in real value, but meanwhile your shares are going up.

RedRuby_2

Out of the two new certificates offered it was the fixed rate savings that I was thinking of keeping and the index-linked one I was thinking of cashing in. But previously it seems that the index-linked certificate has performed better over the 10 years I've had it but the fixed rate not so much so.

kidmugsy

RedRuby wrote: »

Out of the two new certificates offered it was the fixed rate savings that I was thinking of keeping and the index-linked one I was thinking of cashing in. But previously it seems that the index-linked certificate has performed better over the 10 years I've had it but the fixed rate not so much so.

I'd keep the ILSC - I don't know an equally good way of preserving the purchasing power of your money. The other I'd cash in if I thought I could find a better home for it - ISAs, pensions ...?

kidmugsy

For example, Cambridge BS offers an ISA that tracks at 3% above the Bank of England base rate for (nearly) 3 years and you can get your money out on 180 days' notice, or with 180 days' interest penalty on the amount withdrawn.

RedRuby_2

kidmugsy wrote: »

I'd keep the ILSC - I don't know an equally good way of preserving the purchasing power of your money. The other I'd cash in if I thought I could find a better home for it - ISAs, pensions ...?

Thanks, I'll consider doing this. I've noticed that interest rates are being cut at a lot of places at the moment so I have to be fast whatever I decide.