NS&I 5 year index linked saving certs 2011 issue - half way point!

gt94sss2

Anyone got any thoughts on the continued desirability of these bonds going forward given that inflation is heading lower and expected to stay there for a while given oil price falls/supermarket wars etc.?

Regards
Sunil

Rollinghome

gt94sss2 wrote: »

Anyone got any thoughts on the continued desirability of these bonds going forward given that inflation is heading lower and expected to stay there for a while given oil price falls/supermarket wars etc.?

Regards
Sunil

You'd need to look at what other savings/investments are held, how for you they fit in, and the alternatives. Will depend on a whole range of factors, applying to the individual and otherwise, but there'll always be an attraction in a risk free return guaranteed to beat inflation after tax.

The 46th issue is still paying RPI + 1.00%, though not for much longer, and the most recent issue just RPI + 0.15%. So at 2% RPI that's equivalent to between 2.15% and 3.00% net of tax. If RPI stays at 2% or below, a basic rate payer might get better from some interest paying current accounts - provided they haven't already grabbed every one going already and those rates remain. Not so for higher rate tax payers. Or, at the other end of the risk scale, the money could go into equities.

RPI could fall a fair bit further but there's no certainty on how far or for how long. For me, I'm still more than happy to keep a large dollop in ILSC that allows me to be more gung-ho with riskier investments.

ANGLICANPAT

Ive not looked at this thread for a long time . I just bought the bonds and put them to the back of my mind. Havent been checking them at all. Seeing everyones comments , do I need to go back over every month on my account to see that each one is right and that new months workings out havent been based on figures when their calculator was wrong?--or will it all be ok and 'trustable' by the maturity date?

redmalc

I am still happy with mine,made over 2K interest in 43months,better than the banks

veryintrigued

So mine is up 12.36% over 3 years and 6 months.

I make that 3.53% per year net.

PS - can a mod move this to the % free part of the forum please?

veryintrigued

How many threads will appear relating to this product with the latest RPI news?

I reckon at least 6!

bowlhead99

Just to get my comment in now then...

These bonds will give you a return from now going forward based on inflation from now going forward. Whether CPI the last year was 0% or RPI the last year was 1%, is not really relevant - you already didn't choose to exit a year ago.

In March 2013, average supermarket petrol was 138.6p. March 2014, 127.5p. Now rather less. Petrol going down significantly with a few other things going down too has offset other things going up over the last year, for a relatively low overall RPI increase in the past year. If you think petrol will be at 90p this time next year then you might expect that petrol price falls will continue to reduce personal travel and commercial logistics costs and continue to offset the other things that continue going up, resulting in another year of low inflation from here.

And even if petrol doesn't continue to fall, perhaps employers will see the low RPI as an excuse to resist pay increases so everyone has less spare cash, driving down other prices.

This is not a thread to debate the UK economy, there is an entire board for that. But basically if you want long term inflation protection on your cash - which is something that most people should want, because you can't expect banks or building societies to give you a long-term inflation-proof return when you are not risking your capital - then NSANDI inflation-proof bonds remain quite useful. So useful and so demanded, that the government is not making them available to people who don't already have them.

However, their tax free status is no longer as useful, relatively, as it once was
to some people, now the "<£15k 0% on savings" rate comes in next month and the £500/1000 savings interest tax exemption is coming in the year after that.

gadgetmind

Rollinghome wrote: »

For me, I'm still more than happy to keep a large dollop in ILSC that allows me to be more gung-ho with riskier investments.

Well quite. I've got our ILSCs lumped in as "cash" on my spreadsheets, but I know they are there to do a different job.

veryintrigued

Calculator updated:

http://www.nsandi.com/ilsc-calculator

Mine increased 0.538% month on month I reckon - almost back up to the 'valuation' in Jan.

moneyfoolish

veryintrigued wrote: »

So mine is up 12.36% over 3 years and 6 months.

I make that 3.53% per year net.

PS - can a mod move this to the % free part of the forum please?

How is that possible? I've just run mine through the calculator and my increase is 10.75% and I've had mine for just over 3 years and 8 months.