Closing INDEX LINKED SAVINGS CERTIFICATE

icicles

My 23rd Issue Index Linked Savings Certificate closes in a few days. As a basic rate tax payer I cannot decide whether to renew for another 3 years or cash it in and lose the tax free status. The rate offered is only 0.05% per year plus RPI Index Linking based on the opening anniversary at each November. The interest rate is so low and RPI is also low at the moment with the added uncertainty of what it might be in three years time.

If there are other MSE savers in the same position I would appreciate their thoughts on the matter.

kidmugsy

What would you do with the money otherwise?

When next we renew we plan to split the money between 3-year and 5-year certificates, so that if we need emergency access we can use just one of them, so that the other is subject to no penalty for cashing in.

talexuser

Depends on inflation. If the central banks can keep rates this low for a few more years it could stay low, but they have no levers left in the event of the next downturn. They might even want some inflation if deflation becomes a possibility, but I have no faith that they can predict anything after letting 2009 happen. If you have other bets covered, pension, isa, cash float etc etc I would be inclined to keep it going with no houses or cars to buy on the horizon.

masonic

Whether or not you have current accounts paying 3-5% available to you, and whether the interest would fall outside of the personal savings allowance next year will be relevant to your decision.

veryintrigued

Some decent discussion in here


https://forums.moneysavingexpert.com/discussion/4818555

ColdIron

Mine comes up in May and I'll probably roll it over but it is a very small part of my wealth. If it was more significant I would look at better options. The thing is once you lose it you'll never get it back. I can't see the govt restoring them now we have pensioner bonds

icicles

veryintrigued wrote: »

Some decent discussion in here


https://forums.moneysavingexpert.com/discussion/4818555

Many thanks for the link, very useful.

polymaff

ColdIron wrote: »

... now we have pensioner bonds

Do we now have pensioner bonds?

ColdIron

Given their target demographic I can see them being reissued in preference to ILSCs, possibly in 2019

polymaff

ColdIron wrote: »

Given their target demographic I can see them being reissued in preference to ILSCs, possibly in 2019

By which time your slip-up over the name of the bond will only be of academic interest to my wife - over SPA, yet under 65 when the last issue of 65+ Bonds was available. [ITIYM 65+ bonds? ]

ColdIron

polymaff wrote: »

By which time your slip-up over the name of the bond will only be of academic interest to my wife

Au contraire, from the horse's mouth ...

http://forums.moneysavingexpert.com/showpost.php?p=67196256&postcount=16