NS&I Index Linked National Savings Certificates Roll-over Changes

SilverLiz

We have just received our 'roll-over' info for Index Linked Saving Certificates maturing in February. There are quite a few changes and one of them is that they are offering only 0.5%+RPI on 3 years and 5 years with no increase for 5 years as before.


We are trying to decide whether, in the current low interest climate and at these rates, it is better to invest for 3 years or 5 years. We are saving for long term care so hopefully won't need this money yet!


What are other 'money-saving-experts' deciding to do and why - it would be so helpful to know.

kidmugsy

SilverLiz wrote: »

We have just received our 'roll-over' info for Index Linked Saving Certificates maturing in February. There are quite a few changes and one of them is that they are offering only 0.5%+RPI on 3 years and 5 years with no increase for 5 years as before.


We are trying to decide whether, in the current low interest climate and at these rates, it is better to invest for 3 years or 5 years. We are saving for long term care so hopefully won't need this money yet!

i) Are you sure it's 0.5% not 0.05%?
ii) Suppose they stop offering rollover in a couple of years time: wouldn't you regret not going for the full five years?
iii) The counterargument is that they might continue to offer rollover and that in three years time the interest rate on offer might be higher. Crystal ball time!

SilverLiz

Thanks for reply kidmugsy - sorry about typo - did mean 0.05% and you have given us some questions to think about.

opinions4u

Can you get a tax free return that guarantees to beat inflation elsewhere?

SilverLiz

No you certainly cannot - at the present time. I was just wondering about interest rates going up in next five years - though probably pigs will fly first!

Wilkins

SilverLiz wrote: »

No you certainly cannot - at the present time. I was just wondering about interest rates going up in next five years - though probably pigs will fly first!

Fwiw, I rolled over mine for 3 years a few months ago, since I think there is a reasonable chance that real interest rates might be positive in 3-5 years.

lisyloo

Can you get a tax free return that guarantees to beat inflation elsewhere?

No, but it's possible that we might see better returns in 3-5 years.

I'd probably go for 3.
Hedging my bets, but I think there is more chance of better interest rates and a lower chance of the rollover being withdrawn (although rates and terms could get worse).
It's a gamble, but I think I'd hedge my bets.

SilverLiz

Thanks for replies everyone above,
I think we will opt for the 3 year roll over and hedge our bets.
Such a pity they took this investment option away - it was the ideal saving scheme for us old fogies!