Closing INDEX LINKED SAVINGS CERTIFICATE

Rollinghome

polymaff wrote: »

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

Of course they have, but that doesn't suggest any polititian is likely to be as brave/foolhardy as you appear to think when they have so many other options.

They could of course justify changing the basis for new issues but that wasn't what you were suggesting.

AndyT678

polymaff wrote: »

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

I read that as meaning RPI will be used unless the ONS decides to stop calculating it and completely replaces it will a new measure; let's call it the "new price index" or NPI. That is an eventuality that is foreseeable and the T&Cs have covered it.

I don't read it a meaning RPI can be arbitrarily abandoned and switched for some other measure at NS&I discretion if they don't like the current RPI number.

polymaff

Rollinghome wrote: »

Of course they have, but that doesn't suggest any polititian is likely to be as brave/foolhardy as you appear to think when they have so many other options.

Does it now? I wish you would produce evidence to back your opinions.

polymaff

AndyT678 wrote: »

I read that as meaning RPI will be used unless the ONS decides to stop calculating it and completely replaces it will a new measure; let's call it the "new price index" or NPI. That is an eventuality that is foreseeable and the T&Cs have covered it.

I don't read it a meaning RPI can be arbitrarily abandoned and switched for some other measure at NS&I discretion if they don't like the current RPI number.

Then read it again because it means exactly that. You read into it what you want - but it means exactly that.

I also suggest that you study the ONS web-site where they have been discrediting the RPI for over a year now* and are clearly preparing several candidates for its replacement.

and, what a surprise, those other candidates all run at significantly lower rates than the RPI.


* e.g. "the Retail Prices Index and its derivatives have been assessed against the Code of Practice for Official Statistics and found not to meet the required standard for designation as National Statistics"

missile

polymaff wrote: »

Then read it again because it means exactly that. You read into it what you want - but it means exactly that.

I also suggest that you study the ONS web-site where they have been discrediting the RPI for over a year now* and are clearly preparing several candidates for its replacement.

and, what a surprise, those other candidates all run at significantly lower rates than the RPI.


* e.g. "the Retail Prices Index and its derivatives have been assessed against the Code of Practice for Official Statistics and found not to meet the required standard for designation as National Statistics"

I am pleased to see your comment. This has troubled me too.

BobQ

The Coalition Government has made considerable revenue gains by changing the index.

Public sector pensioners found their inflation linking switched to CPI from RPI reducing their future benefits (you can argue that this was fair or not but their pension benefits were earned based on scheme publications that specified RPI)

Most welfare benefits used to rise by RPI but were switched to CPI.

In contrast rail prices go up based on RPI +

Generally the Government is using CPI wherever there is an advantage in doing so.

masonic

polymaff wrote: »

Does it now? I wish you would produce evidence to back your opinions.

Can you provide evidence to back your opinion that NS&I can replace RPI while the ONS maintain it? I'm certainly happy to concede that the ONS has the power to replace RPI with another index and that would result in the measure used by NS&I changing, but we are referring to what NS&I have it within their power to do and your error is one of making assumptions about an ambiguous definition.

masonic

BobQ wrote: »

TGenerally the Government is using CPI wherever there is an advantage in doing so.

Generally, yes, although the most similar comparison here would be between NS&I ILSC and index linked gilts. There are index linked gilts with maturities that are decades away. Meddling with these would cause some quite significant economic problems, so the future of RPI is somewhat assured while these are still around.

polymaff

masonic wrote: »

Can you provide evidence to back your opinion that NS&I can replace RPI while the ONS maintain it? I'm certainly happy to concede that the ONS has the power to replace RPI with another index and that would result in the measure used by NS&I changing, but we are referring to what NS&I have it within their power to do and your error is one of making assumptions about an ambiguous definition.

Yes. I got Paul Lewis to ask the Head of NS&I to clarify this exact point, during a BBC "Moneybox" programme interview.

masonic

polymaff wrote: »

Yes. I got Paul Lewis to ask the Head of NS&I to clarify this exact point, during a BBC "Moneybox" programme interview.

Thanks, that would certainly remove the uncertainty. So this is another reason to prefer the shorter dated certs..