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

KTF

Be aware that if you leave it to the last minute to send back the form it may bounce as they don't have a signature on file.

I sent my form back last week and a we need your signature (whitnessed) before we can do anything letter arrived today.

polymaff

littly_kitty wrote: »

I thought historically they have only ever done RPI.

Also true of benefits - until they changed from RPI to CPI. NS&I's past is no guide to the future.

littly_kitty wrote: »

I was also under the impression that, historically, they've always offered a renewal (although of course, we might be entering unchartered territory as I belive they no longer of these to new customers, which is something of a first).

See above comment

[Deleted User]

masonic wrote: »

Are you sure that a 5 year certificate guarantees index linking based on RPI for the whole term?

I believe there has been discussion of this before. Not sure of the answer. There seems to be scepticism (see above) that NSI will ever change from RPI to CPI. I think they might well change, CPI is the government's preferred measure of inflation after all. But I think they will only change the terms at renewal, or for new purchases, not mid-term.

whattochoose

KTF wrote: »

Be aware that if you leave it to the last minute to send back the form it may bounce as they don't have a signature on file.

I sent my form back last week and a we need your signature (whitnessed) before we can do anything letter arrived today.

I'm a little confused by this. Please clarify.

KTF

I sent in my form to cash the certificates in.

They replied saying they didn't have a copy of my signature on file so please sign the enclosed form and have it witnessed (non-family member) so they know it's me and return it.

I took mine out 5 years ago so there may well be others who get sent this letter.

masonic

Deleted_User wrote: »

I believe there has been discussion of this before. Not sure of the answer. There seems to be scepticism (see above) that NSI will ever change from RPI to CPI. I think they might well change, CPI is the government's preferred measure of inflation after all. But I think they will only change the terms at renewal, or for new purchases, not mid-term.

They don't need to change the terms. They terms already allow for them to change the index used for index linking. RPI is no longer a national statistic. It could be completely replaced in the future, for example by RPIJ, in which case they would not be able to wait until renewal. This seems at least as likely as a switch from RPI to CPI.

AnotherJoe

masonic wrote: »

Are you sure that a 5 year certificate guarantees index linking based on RPI for the whole term?

Of course it does, same as 3 year guarantees 3 years. They can't arbitrarily change it mid point. That's why it's 5 year certificate (if you opt for 5) . If they could change it, it would be a 5 year with a break point at 3 years (or some other period)

AnotherJoe

dqnet wrote: »

If anything, they are waiting for enough people to cash in so that they can re-sell them as at present nobody is cashing in.

That makes no sense. They would still be selling the same total amount so why would they care if but was to new people or renewals. They have a goal to sell a certain amount they won't care who it's to.

dqnet wrote: »

With regards to renewing at only CPI, this wasnt mentioned at all.

Well it wouldn't be that's well beyond the pay grade of someone in a call centre

dqnet wrote: »

3 year and 5 year seem to be exactly the same with no 'right' or 'wrong' decision. It mainly depends on what or if or when you need the money for. I'm probably going to renew all mine for the 3 year one and just cash in the index linking and interest over the last years to enjoy

There is a clear difference.
With 5 year you are locked into RPI for 5 years but can withdraw with no effective penalty as long as it's timed right. So you could get exactly the same as a 3 year as long as you cashed in at say 3 years one week but you have the certain option to keep it going for 4 or 5 years.

Downside of 3 year there is a possibility that the renewal with be at CPI, or there is no renewal.

Upside of 3 year there is a possibility they will offer extra interest upon renewal but not have any certificates newly at sale at that point.

I'd say the downside is far higher than the upside because it makes no sense that they would offer extra incentives at 3 year mark yet not be selling new certificates at that point. If they need to offer extra incentives to increase renewal rates they will need to sell more and this means not limiting it to the pool of 3 year holders.

This is the realisation I've come to and why I'm letting mine auto renew for 5.

masonic

AnotherJoe wrote: »

Of course it does, same as 3 year guarantees 3 years. They can't arbitrarily change it mid point. That's why it's 5 year certificate (if you opt for 5) . If they could change it, it would be a 5 year with a break point at 3 years (or some other period)

Then why do the T&Cs state that '"RPI” means the Retail Prices Index compiled by the Office for National Statistics, or any Index replacing it?' If they couldn't change it part way through the contract, surely they would simply state '"RPI” means the Retail Prices Index compiled by the Office for National Statistics'.

AnotherJoe

masonic wrote: »

Then why do the T&Cs state that '"RPI” means the Retail Prices Index compiled by the Office for National Statistics, or any Index replacing it?' If they couldn't change it part way through the contract, surely they would simply state '"RPI” means the Retail Prices Index compiled by the Office for National Statistics'.

Well that's a fair point,I suppose they have to cover themselves in case RPI is replaced.
But note that CPI has not replaced RPI it's an additional index. So it's not the same as them saying that they reserve the right to switch you to CPI..

So for the point under discussion, 3 year or 5 year, should at say year 3 RPI be replaced by an index you don't like, if you have a 5 year certificate you can still bail out at the 3 year point and you'd be in the same position as if you'd got a 3 year certificate that was expiring.