NS&I's Crystal Balls

polymaff

In today's post - an NS&I letter of the 5th March 2013:

"Certificate number: xxxx
Maturity date: 9 April 2013
Estimated value on maturity: yyyy

The estimated value is based on the Retail Prices Index (RPI) figure for March 2013. The final value of your Certificate will be calculated using the RPI figure for April 2013, which hasn't been published yet, so it could be higher or lower than the estimate. We'll send you a statement showing the final value shortly after the maturity date."

The March RPI figure will not be released until mid-April. The April figure will not be released until mid-May.

Have I missed something or is NS&I just as careless as ever?

gozomark

can't see what the problem is

Sceptic001

The problem is that under the T&Cs, a certificate maturing in April uses the RPI for February (published in mid March). So the letter should have read:

The estimated value is based on the Retail Prices Index (RPI) figure for [STRIKE]March[/STRIKE] January 2013. The final value of your Certificate will be calculated using the RPI figure for [STRIKE]April[/STRIKE] February 2013, which hasn't been published yet, so it could be higher or lower than the estimate. We'll send you a statement showing the final value shortly after the maturity date.

Certainly careless, although I would not say NS&I are usually careless in my experience.

polymaff

Sceptic001 wrote: »

The problem is that under the T&Cs, a certificate maturing in April uses the RPI for February (published in mid March).

You know that, I know that - so I regard it as quite unacceptable that a form letter with these serious errors should be in use. I find NS&I to be repeatedly careless. We pay NS&I managers to prevent this sort of incompetent malarkey being issued.

In the past NS&I have supplied inappropriate T&Cs on many occasions, and it has taken quite some effort to get them to correct the sections of the appropriate T&Cs particularly important to holders of Inflation-Linked Certificates, namely how the interest is calculated, which, until quite recently, were absolutely wrong Then there was the issue of their definition of, and commitment to, RPI.

They have sent me incorrect statements and have actually paid the wrong amounts of interest on several occasions - although I'm probably on the plus side on the last point, NS&I on one occasion finally stating that the overpayment was so embarrasingly in error that I was to keep the money as compensation.

Sceptic001

Clearly you have had numerous problems with NS&I, which is obviously unacceptable, but I would suggest not typical. Very few complaints on this forum relate to NS&I. Personally I have had numerous accounts (starting with my Post Office Savings Book in the 1960s ) and cannot remember a single problem.

Also I don't understand your reference to "inappropriate T&Cs" for ILSCs. As far as I remember, the method of calculating interest has always been clearly stated in the T&Cs (although some people have misunderstood the difference between RPI and the inflation rate, causing themselves much confusion).

Finally, I am not aware of the NS&I position on "their definition of, and commitment to, RPI". I would be interested to see these. Please can you supply links to relevant NS&I documents. Thanks.

polymaff

1. By "inappropriate" I am generally thinking of out-of-date T&Cs - often by years.

2. In terms of "some people have misunderstood the difference between RPI and the inflation rate," - that has been the exact shortcoming that NS&I suffered from until very recently. I quote the T&C dated 18 January 2010:

"17. ... value will be calculated as V x B/A ... In the event of this calculation being a negative number ..."

The ratio of the entry and exit RPI can never be negative - unless one suffers from that self-same misunderstanding you quote and/or one doesn't understand the difference between division and subtraction.

3. Same T&Cs, para 2(k): "RPI means Retail Price Index compiled by ONS or any index replacing it". This is far too loose a definition to be of any value. MoneyBox took them up over this issue and they would not confirm at that time that they would not replace it with the CPI.

There, you see. No BS, no hysterics, no exaggeration - just the plain facts of incompetence.

It is not just NS&I. We live in a world of brash claims and bold mission statements - but I believe that behind that front, incompetency is more rife than ever.