Closing INDEX LINKED SAVINGS CERTIFICATE

enthusiasticsaver

I bought a new car with the proceeds of my index linked national savings certificates. The choice was between that, withdrawing cash from current accounts earning 3/4 and 5% or cashing in some of my stocks and shares portfolio. The interest rate was pitiful on the national savings certificates and because I work part time and earn under £15k I now get my interest gross of tax anyway.

polymaff

ColdIron wrote: »

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

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

ITIYM horse's ar*e in that case. There were NS&I Pensioner Bonds some years ago. The recent issue were not Pensioner Bonds and many state pensioners were excluded.

'Nuff sed.

EdGasket

Big advantage is they are tax-free. Inflation will hit at some point; you can't print money without consequences.

polymaff

EdGasket wrote: »

Big advantage is they are tax-free. Inflation will hit at some point; you can't print money without consequences.

Disagree with the "Big". 3% taxed from Santander beats 0.82% untaxed from NS&I. A concern is also which Index is used in the future. Under the current T&Cs NS&I can substitute CPI - or anything else - for RPI whenever they want. Staying in ILCs is a risk - just like everything else.

masonic

polymaff wrote: »

Disagree with the "Big". 3% taxed from Santander beats 0.82% untaxed from NS&I. A concern is also which Index is used in the future. Under the current T&Cs NS&I can substitute CPI - or anything else - for RPI whenever they want. Staying in ILCs is a risk - just like everything else.

Also, the majority of people will not pay any tax on their other savings from next tax year anyway.

Presumably NS&I can only substitute a different measure at renewal, not mid-way through a term.

polymaff

masonic wrote: »

Presumably NS&I can only substitute a different measure at renewal, not mid-way through a term.

As I read it, NS&I could change index in mid-certificate - just as existing state pensions were.

masonic

polymaff wrote: »

As I read it, NS&I could change index in mid-certificate - just as existing state pensions were.

Hmm, I can't see any evidence of that just browsing the T&Cs casually. They state:

http://www.nsandi.com/files/published_files/asset/pdf/index-linked-savings-certificates-key-features.pdf

The Index
21. An index-linked valuation under these terms and conditions will be related to the movement of the RPI. This movement is indicated by the RPI figure issued monthly and subsequently published in the Gazettes.
22. For the purposes of these terms and conditions, the RPI figure applicable to any calendar month will be the RPI figure published in the immediately preceding month. For example if the Certificate is purchased in March, we would use the RPI figure for January (published by the Office for National Statistics part way through February) as the RPI start level.

No mention in that part of the T&Cs that the RPI could be substituted for something else. References to index linking elsewhere in the T&Cs also specifically state RPI. Where are you seeing a clause that would allow them to change it?

polymaff

masonic wrote: »

Hmm, I can't see any evidence of that just browsing the T&Cs casually

Your error, a commonly made one, is in assuming that they mean what you mean. Look at Definition m) in the same document.

"m) “RPI” means the Retail Prices Index compiled by the Office
for National Statistics, or any Index replacing it;"

That is what they mean EVERY TIME the term RPI appears in that document.

Rollinghome

polymaff wrote: »

Your error, a commonly made one, is in assuming that they mean what you mean. Look at Definition m) in the same document.

"m) “RPI” means the Retail Prices Index compiled by the Office
for National Statistics, or any Index replacing it;"

That is what they mean EVERY TIME the term RPI appears in that document.

You seem to be referring to the theoretically possible rather than the politically possible.

polymaff

Rollinghome wrote: »

You seem to be referring to the theoretically possible rather than the politically possible.

Not at all. As I mentioned previously, unilateral RPI to CPI switches by the government have happened in recent years.