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

polymaff

veryintrigued wrote: »

The calculator has been updated.


Looks to be a 0.5% decrease from last months value.


The July figures meant that over 4 years and 2 month I calculated an increase of 12.62%.

I make that 3.02% per year.

Remember, these are the June figures, released in July. Note how the yield is dropping. My own model, which extrapolates the latest data to the end of term, estimates the redemption value as equating to an AER of 2.74%.

masonic

veryintrigued wrote: »

The calculator has been updated.


Looks to be a 0.5% decrease from last months value.


The July figures meant that over 4 years and 2 month I calculated an increase of 12.62%.

I make that 3.02% per year.

Not quite sure how the NS&I calculator is working that out...

The main movements for RPI and RPIJ in June 2015 are:

The all items RPI is 258.9, up from 258.5 in May.

http://www.ons.gov.uk/ons/rel/cpi/consumer-price-indices/june-2015/cpi-briefing-note-june-2015.html

Edit: In fact, the NS&I calculator must be mistaken as one set of my certs have a June anniversary and these too are showing as having decreased in value, but my understanding is that certs cannot go below their anniversary value.

polymaff

Here are some intermediate computations for a 5-year certificate taken out on 19th May, 2011. The columns are coupon for year, end of year valuation and indexation applied for that year. The final end of year valuation is, of course, an extrapolation.

.................£15,000.00
...........0.25% £15,572.98 103.57%
...........0.35% £16,138.40 103.28%
...........0.40% £16,598.79 102.45%
...........0.65% £16,856.51 100.90%
.......... 0.86% £17,172.47 101.01%

This spreadsheet has always been within a penny of NS&I's final valuations.

veryintrigued

masonic wrote: »

Edit: In fact, the NS&I calculator must be mistaken .

It wont be the first time it is - I think there have been two occurrences on this thread (without looking back)

It reinforces Pollys judgement on them.

whattochoose

If I get £17000 or over on my investment of £15000 on 14th May 2011, I'll be quite satisfied.

polymaff

whattochoose wrote: »

If I get £17000 or over on my investment of £15000 on 14th May 2011, I'll be quite satisfied.

It's 2.74% per annum, so not bad in current circumstances - but these certs are now very old. More recent ones will not be anything like so bountiful. On the same basis, a three year ILC with one year to go is indicating 1.6%; a two year one, about 1%.

Mr_Prudent

An old TIM article published just after the May 2011 issue was offered states that each year’s RPI percentage rise is calculated on the rise in the RPI figure on the month two months previous to the anniversary
So the percentage increase for May 2015 is calculated on the percentage increase from March 2014 to March 2015. The percentage increase is on the RPI figures between these two dates, i.e.: March 2014 was 254.8 and March 2015 was 257.1. So the increase for this year is just a tad over 0.9% which fits in perfectly with polymaffs excellent calculations. (Plus the 0.65% set rate for 4th year) if I’ve read this correctly.

masonic

polymaff wrote: »

On the same basis, a three year ILC with one year to go is indicating 1.6%; a two year one, about 1%.

Future inflation is notoriously difficult to predict, though. In a year from now, RPI could have risen only around 1%, but forecasts for Q4 2015 average 1.4%, and for 2016 the average forecast is 2.9%. What actually happens is anyone's guess.

polymaff

masonic wrote: »

Future inflation is notoriously difficult to predict, though. In a year from now, RPI could have risen only around 1%, but forecasts for Q4 2015 average 1.4%, and for 2016 the average forecast is 2.9%. What actually happens is anyone's guess.

Quite, which is why I've quoted the yields to three, then two, then less than one significant digit(s).

KTF

polymaff wrote: »

Here are some intermediate computations for a 5-year certificate taken out on 19th May, 2011. The columns are coupon for year, end of year valuation and indexation applied for that year. The final end of year valuation is, of course, an extrapolation.

.................£15,000.00
...........0.25% £15,572.98 103.57%
...........0.35% £16,138.40 103.28%
...........0.40% £16,598.79 102.45%
...........0.65% £16,856.51 100.90%
.......... 0.86% £17,172.47 101.01%

This spreadsheet has always been within a penny of NS&I's final valuations.

Could you share the spreadsheet?