NS&I Indexed linked Savings

silvermum

Can someone tell me - if you plan to cash these in before the 5 year anniversary, is it important to do it just after the annual anniversary of purchase?

I have £15k in one I bought in May 2011, and I may need access to the cash for a house move soon, but I can't remember if there is a sort of 'bonus' to be gained annually as a result of the tiered interest rate, and if it's really important to reach each anniversary, if possible?

I also have money in a Santander 123 acct and could use that instead, but I will need to use one or the other, and I can't work out which is best?

missile

You are best to cash NS&I Savings Certs immediately after anniversary.
You can check on line to find out how much you will get, that may help you decide.
The jury is out on whether it is better to retain NS&I or not.
I am still trying to decide, I used to be decisive but now I am not so sure <LOL>

ManAtHome

silvermum wrote: »

Can someone tell me - if you plan to cash these in before the 5 year anniversary, is it important to do it just after the annual anniversary of purchase?

I have £15k in one I bought in May 2011

These were issued under the 'old' rules, so you get interest + RPI up to the last complete month before you cash them in. Bear in mind that the interest increased each year on the old certs, so you do have a penalty for cashing in early (although not massive for these... see below).

I have one from June 2011 - interest rates were RPI + 0.25, 0.30, 0.40, 0.65, 0.86 (year 1 to year 5).

kidmugsy

masonic wrote: »

These are still measured using the original RPI (unless I've missed a really significant change). Not the European Harmonisation Index aka CPI or the geometric mean distorted RPIJ figure.

Yes, they still use RPI rather than Mr Brown's beloved CPI. The long term difference between the two inflation rates is, I read recently, 0.8% p.a.

missile

bowlhead99 wrote: »

It depends whether you want to get ongoing access to a tax free inflation protected government backed store of cash, or whether you would prefer to surf around whatever deals are available hoping to always beat inflation yourself. In the long run you may find it a challenge to do the latter.

Personally I would quite like access to the NSANDI index linked certificates but they are so (potentially) expensive for the government, that they're not making them available to anyone who doesn't already have them, allowing renewals only.

The 1.x% return you got over the last year was a historic rate and not an indicator of the future long term rate. The nationwide interest rate is 5% now but only on a small amount of money and drops by four fifths once the account has been open a year. Presumably you already have it filled anyway, if you had enough spare cash that you were locking some away for the long term with NSANDI.

I note your comment that it is a valuable hedge against inflation. However, I do not believe RPI will rise significantly over the next 12 months.
RPI is currently zero and if that continued the return on my investment would be a dismal 0.25% next year. http://www.ons.gov.uk/ons/rel/cpi/consumer-price-indices/february-2015/index.html


I have decided to withdraw this investment.

masonic

missile wrote: »

I note your comment that it is a valuable hedge against inflation. However, I do not believe RPI will rise significantly over the next 12 months.

The consensus forecast for RPI during 2015 is 1.6% (that's a 1.9% gain from the current value, since the index is currently lower than it was at the end of 2014) and for 2016 is 3%.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/412391/forecomp_201503.pdf

RPI is currently zero...

No it is not. RPI is currently 1.0%, as stated in your link.

kidmugsy

missile wrote: »

I do not believe RPI will rise significantly over the next 12 months.
RPI is currently zero and if that continued the return on my investment would be a dismal 0.25% next year. http://www.ons.gov.uk/ons/rel/cpi/consumer-price-indices/february-2015/index.html

I don't think it will rise much either. The latest RPI inflation rate, though, was 1% p.a.; it's CPI that had an annual rate of 0%.

I'd rather not give up an irreplaceable, unique investment until I see what policies the next government plans.

missile

sorry my bad.

veryintrigued

Inflation results out later today so expect some more discussion this afternoon after the NS&i calculator is updated!

fairleads

The capital value of my 15k nsandi index linked savings has declined by £68.86 between 4 Feb and 13 Apr this year.
Hope that answers your question Missile