NS&I Index-linked Savings - Renewal

Sceptic001

masonic wrote: »

That's what I thought too, but it seems the head of NS&I has a different opinion: https://forums.moneysavingexpert.com/discussion/comment/69513963#Comment_69513963

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

It is slightly disturbing if the Director of NS&I takes the words "or any Index replacing it" to mean
"or any Index NS&I choose to replace it" rather than the more obvious interpretation:
"or any Index the ONS choose to replace it."

In the unlikely event that NS&I were to attempt this, it would no doubt end up in court. Win or lose, it would also be massively politically damaging to the government.

AnotherJoe

GillyFlower wrote: »

I am going to deal with this all tomorrow including review of other savings.

Just a thought - going back to ILSCs. I know I can renew for another 5 years but just looking at paperwork what is the benefit of keeping to the 5 year term?

The interest is the same but is it because if their terms changed you know they have the commitment to you for 5 years. Whereas change to 3 years you are stuck with it and may loose an extra 2 years of benefit?

I know I sound a little naive but am grateful to anyone that can just re-assure me as to my benefit to stay 5 years if I can leave the money there.

That is correct. Yes as in other discussions there is the small theoretical chance they will renege on the RPI index but in that case you'd still be no worse off than if you'd gone for 3 years. "Heads you win, tails you dont lose"

Sceptic001

AnotherJoe wrote: »

That is correct. Yes as in other discussions there is the small theoretical chance they will renege on the RPI index but in that case you'd still be no worse off than if you'd gone for 3 years. "Heads you win, tails you dont lose"

Indeed, and as an additional safeguard, there is the following clause in the T&Cs:

126 If a change is to the Certificate holder’s detriment we will
let them know personally at least 30 days before the change. If
this is the case the Certificate holder can switch to another NS&I
product or cash in their Certificate without notice or penalty (see
paragraph 62) within 60 days of us telling them.
https://www.nsandi.com/files/published_files/asset/pdf/index-linked-savings-certificates-key-features.pdf

So in the unlikely event that NS&I switched indexes mid-term, you would have the option to ditch ILSCs penalty-free. Probably a good call if they go for the Hatpins, Typewriters and Radio Valves Index. More of a difficult judgenent call if they were to go for CPI.

GillyFlower

Thank you all. My head is in a spin because in amongst all this my independent 94 year old Mum (who lives on her own) was taken ill last Monday, hospital overnight but back home. I am becoming her daily carer - even though not living with her - it is a constant worry. (Three nasty falls since last September.)

I can't see my children looking after me like I do my Mum. I know ... forget savings and spend it all now mmm....... what shall I buy.

Being serious - I will keep to 5 years Bond - then if things start to change at least I know you are all here in the background with your thoughts to help me make decisions.:)

kidmugsy

tocsin wrote: »

Having said that, they can't reduce the +% much more

Oh I dunno; have you looked at the negative real interest rates on index-linked Gilts lately?
http://dmo.gov.uk/reportView.aspx?rptCode=D3B.2&rptName=50236664&reportpage=Gilts/Daily_Prices

masonic

Sceptic001 wrote: »

In the unlikely event that NS&I were to attempt this, it would no doubt end up in court. Win or lose, it would also be massively politically damaging to the government.

Probably not, as NS&I is a member of the Financial Ombudsman Service. I'd imagine those who complained that they had a different interpretation of the word "replaced" would have a pretty good case without needing to go to court. On the other hand, the head of NS&I might know something we don't.

GillyFlower

All of you are being very helpful but I am afraid some of it is going above my head. So I will leave you to discuss the 'what if' scenario and I admire all your knowledge on money matters.

In the meantime I will keep my 5 year Index Linked Certificate as they don't make them anymore.;) Anyway everything in life is so uncertain except one thing. Thank you all for responding.