Are NS&I totally safe?

gyrospitta

i have decided to pull my hard won savings out of 'wobbly' institutions and go for a lower rate in National Savings. we have been hearing about the financial compensation amounts over the past few days - ie first £2000 guaranteed, 90% of the next 33,000 also. this may seem like a silly question to some of you. but what about NS&I? Does the same apply, or are they totally safe (or safest)like they seem to be saying?. Could they go bust too, and if they do do you only get the 90% of 33% back or is the lot guaranteed? it's all a but confusing.........

purch

Could they go bust too

If they do, then the Country has gone bust too, and all ££ would be virtually worthless !!!

cheerfulcat

NS&I is an arm of the Treasury - have a look here. Yes, it's 100% safe. I have my own reservations about keeping money there but financial security is not one of them.

SussexResearcher

gyrospitta wrote: »

I have decided to pull my hard won savings out of 'wobbly' institutions and go for a lower rate in National Savings.

Let's put NS&I in perspective.

3- and 5-year Index-Linked Savings Certificates:

Current RPI 4.1 + 1.35% = 5.45% tax-free, equivalent to 6.99% for the basic-rate tax payer and 9.08% for the higher-rate payer, according to my calculator. And they are absolutely safe. I do not know many vehicles of investment that match this.

Several of the NS&I products are, in fact, unsung heroes.

The BoE has just decided to introduce £10b liquidity into the economy, so it would become easier for banks to borrow money, which had become restricted, and much more costly.

This should bring down all interest rates before long, although they could bring inflationary pressures. The net effect of this would be that lending institutions offering the current high interest rates to investors will soon not have to do so.

exel1966

Is the world going to end tomorrow ? NS&I chances of going 'bust' are pretty similar !!
Your money (as per FSCS limits) is just as safe in a 'wobbly institution' as it is with NS&I.

I think people need to sit back and stop panicking !!

Cook_County

It is secure. That does not mean it is risk free because of:

1. Inflation, and
2. Currency risk because they only offer sterling denominated products and the Pound might well collapse at some point

amcluesent

Obviously families pauperised by 3.5% undated 'war loan' will have a view about the risk of loaning to 'safe as houses' HMG

Fella

Well it's not completely unheard of for a Government to go bust.

Nevertheless, I think the index-linked certificates are an outstanding product if you're a higher-rate taxpayer.

Jonbvn

SussexResearcher wrote: »

Let's put NS&I in perspective.

3- and 5-year Index-Linked Savings Certificates:

Current RPI 4.1 + 1.35% = 5.45% tax-free, equivalent to 6.99% for the basic-rate tax payer and 9.08% for the higher-rate payer, according to my calculator. And they are absolutely safe. I do not know many vehicles of investment that match this.

Several of the NS&I products are, in fact, unsung heroes.

SR,

Absolutely agree. I have been singing the praises of index linked savings certs for some time. A lot of posters on here seem to just look at the headline rates only, without regard for tax. IMHO, index linked savings certificates should form some part of everyone's portfolio.

BTW, I just love the way you can re-invest any maturing certs!

Aegis

Jonbvn wrote: »

SR,

Absolutely agree. I have been singing the praises of index linked savings certs for some time. A lot of posters on here seem to just look at the headline rates only, without regard for tax. IMHO, index linked savings certificates should form some part of everyone's portfolio.

BTW, I just love the way you can re-invest any maturing certs!

They'd form part of my profile if I didn't have my cash savings earmarked as my emergancy fund. I have 40% or so of my overall portfolio in cash savings (including current account), and what's left is invested in unit trusts and other similar products, with very little room left in my own personal strategy for such products.

When I'm considerably richer and wanting to take less risk than I do now, they'll definitely form part of my long-term plan!

nrsql

>> Yes, it's 100% safe.
lol

>> Is the world going to end tomorrow ? NS&I chances of going 'bust' are pretty similar !!
Depends on your definition of risk. NS&I/the country doesn't have to go bust for you to lose access to some or all of the money.

Have a look what was actually said about the recent "guarantee" - and consider why it was given in those terms and at that time.
Look at the reasons given for not supporting failed pension schemes.
Have a look at what we have signed up to with regard to EU competition law.

Nothing is ever as black and white as that.
I don't agree that diversification in stock market investments mitigates risk but with savings it should do. I have sympathy for all those people queuing to retrieve all their life savings from NR but really wonder if they will learn from the experience.