NS&I Index Linked 3 or 5yr

LXdaddy

6022tivo wrote: »

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My thought is the current offering of 0.01% fixed element may increase in 3 years time when it comes for renewal.
My negative thought is that they may stop allowing renewals, and I'll miss out on 2 years of index linking.

You've summed up the pros and cons well. I have over 80 individual Indexed Linked investments. When the fixed addition % started dropping I went through a period of always renewing for the shorter period (in the hope that the addition would rise) I've recently renewed some at 5 years in the fear that the next time they renew would be at CPI + rather than RPI +. So perhaps I can't make my mind up - never been good at crystal ball stuff.

My current strategy is to get a mix of 3 and 5 year - so as each comes up for renewal I alternate between 3 and 5 years.

(I do have two 2-year contracts that I keep renewing as 2 year)

To answer another question - 3 and 5 year investments can be renewed as either 3 or 5 years - no restriction on changing their term. 2 year investments can be renewed as either 2, 3 or 5 year.

moneyfoolish

6022tivo wrote: »

One of my index linked certs is up for renewal.
It is a 5 year one (Possibly renewed 5 years ago) which is a nice little £21190 value.

Options for me are auto renew for 5yr, or write and switch to a 3yr.

The rates are exactly the same, so I don't see why I wouldn't renew for 3 years instead of 5? My thought is the current offering of 0.01% fixed element may increase in 3 years time when it comes for renewal.
My negative thought is that they may stop allowing renewals, and I'll miss out on 2 years of index linking.


Thoughts?

My wife and I have recently renewed and taken the 5 year option but next week we have to decide whether to renew the 65+ Guaranteed Growth Bonds. We have a choice of 3 years at 2.20% or 5 years at 2.25%. If we took the 5 year option and decided to sell them after 3 years it would only cost us about £80 after tax more than if we bought the 3 year ones and that would depend on how interest rates go in the next couple of years. I could always put it into as ISA but I'm nearly 73 and we're at the stage where we're gradually spending our money on holidays as opposed to saving and IMO it's too risky to be in the stockmarket at this time at our ages!

gatters

What are NS&I's motives when they decide whether to allow renewals or not?

david78

Anyone with index linked certificates that have matured this month (from March 1st) should check that their instructions on maturity have been actioned properly.


NS&I have some technical issues currently which has delayed re-investments into further 3 or 4 year certificates. They haven't said when these will be resolved.

Linton

gatters wrote: »

What are NS&I's motives when they decide whether to allow renewals or not?

It will be a Treasury decision. At the moment the government is being remarkably generous allowing you to renew. Is is paying you a lot more for lending them the momney than it would if it sold the bonds on the open market.