NS&I ILSC maturing May 2019

[Deleted User]

My index-linked NS&I savings certificate matures in May 2019. It was originally 5 years from May 2011, then I renewed for 3 years in May 2016.

Doh, I should have renewed for 5 years in May 2016. The 2019 renewal is at CPI inflation, not RPI inflation. If I'd renewed for 5 years in 2016 I would have got an additional 2 years index-linking at RPI.

Anyway, too late to cry over a past mistake. The offer is again 3 or 5 years renewal, both at CPI, plus 0.01%, all return tax free.

Question: now that the issue of CPI v RPI is no longer an issue, is there any point going for the 5 year term instead of 3 years? Depending on where inflation goes, there may be an advantage in not being tied in for 5 year. Any views please?

IanManc

Deleted_User wrote: »

My index-linked NS&I savings certificate matures in May 2019. It was originally 5 years from May 2011, then I renewed for 3 years in May 2016.

Doh, I should have renewed for 5 years in May 2016. The 2019 renewal is at CPI inflation, not RPI inflation. If I'd renewed for 5 years in 2016 I would have got an additional 2 years index-linking at RPI.

Anyway, too late to cry over a past mistake. The offer is again 3 or 5 years renewal, both at CPI, plus 0.01%, all return tax free.

Question: now that the issue of CPI v RPI is no longer an issue, is there any point going for the 5 year term instead of 3 years? Depending on where inflation goes, there may be an advantage in not being tied in for 5 year. Any views please?

I'd renew for five years, in case they decide to stop renewals altogether.

badger09

What is the penalty for early withdrawal on this rollover?

What if they only offer 3 year renewal in 2022? Or no renewal at all:(

badger09

IanManc wrote: »

I'd renew for five years, in case they decide to stop renewals altogether.

So would I.

polymaff

There are many of us having to ponder this - even though we've been 5-year renewing in anticipation of this change for years.


The funny thing is that the ONS has been rubbishing RPI for years - and recently they've been rubbishing CPI in favour of CPIH. Wait for the NGU - Never-goes-up - to be introduced..


Seriously, though, ILSCs were - still are until the end of the month - a no-brainer. Now they're starting to look more like ISAs and Premium Bonds - of primary benefit to higher, or more, rate tax-payers.


I wish that they'd sugared the pill a little by increasing the coupon.

ColdIron

Do you need the money in 3 years? If not it seems a bit of a no brainer. These things won't roll over for ever

ffacoffipawb

You can split it into 3 and 5 year portions. Useful if you think you may need some of the money early because if you cash in one portion it has no effect on the other, whereas partial encashment of a whole bond means loss of some interest on that part of the bond that isn't cashed in.

Stubod

..just rolled over ours, was a 3 year but opted to renew for 5 years. Seems to be the best choice of you don't need the money at the mo...

[Deleted User]

Thanks for all replies. I'm going for rollover for 5 years. You can cash in early without losing any benefit of indexing, providing you do it immediately after an anniversary date. The loss of 90 days interest at 0.01% pa is negligible.

speedyrite

Deleted_User wrote: »

Thanks for all replies. I'm going for rollover for 5 years. You can cash in early without losing any benefit of indexing, providing you do it immediately after an anniversary date. The loss of 90 days interest at 0.01% pa is negligible.

I’m not quite clear on how to “cash in early without losing any benefit of indexing”. Can you elaborate for me please?

From the Summary box dated 1 May 2019 on NS&I website:

“Can I withdraw my money?

Yes, before the end of the term you can cash in all or part of your Certificate online, by phone or by post with no notice. We will deduct a penalty equal to 90 days’ interest on the amount you cash in. Also, you won’t earn any index-linking on the whole Certificate for the investment year in which you cash in, even if you only cash in part of your Certificate. You need to keep a balance of at least £100 to keep your Certificate open.

At the end of the term you can cash in with no penalty. We’ll contact you about a month before to explain the options available at that time.”

polymaff

speedyrite wrote: »

I’m not quite clear on how to “cash in early without losing any benefit of indexing”. Can you elaborate for me please?

From the Summary box dated 1 May 2019 on NS&I website:

“Can I withdraw my money?

Yes, before the end of the term you can cash in all or part of your Certificate online, by phone or by post with no notice. We will deduct a penalty equal to 90 days’ interest on the amount you cash in. Also, you won’t earn any index-linking on the whole Certificate for the investment year in which you cash in, even if you only cash in part of your Certificate. You need to keep a balance of at least £100 to keep your Certificate open.

At the end of the term you can cash in with no penalty. We’ll contact you about a month before to explain the options available at that time.”

So you cash in on day one of the investment year.