NS&I to cut premium bond rate and other accounts

coachman12

AS I thought----you cannot name any. Gilts are "near-cash" as you put it ( that means NOT cash); they are "as good as easy access" ( but they are NOT easy access are they ? ) ; UNTIL the crisis they paid reasonable yields ( didn't every institution ?).
Nope, no answer there. So we'll say d63 was correct shall we ----someone who obviously knows his onions.

Sailtheworld

zagfles said:

Sailtheworld said:

NS&I has been the home for apathetic cash for decades. They didn't need teaser rates and there's no evidence that this £1bn was part of a teaser rate strategy i.e. it's a conspiracy theory.

Is there evidence it was anything else? I'm just speculating they might be acting like all other banks act. Without any proof to the contrary, I find that far more credible than it being some sort of sinister ploy to enrich those who have substantial savings by giving them slightly more than the marking leading rates of commercial banks for a few months.

I don't think it's a sinister ploy; just slackness on the part of government. They already attempted to reduce rates but delayed - easy to 'support people during Coronavirus' when you're spending other people's money and the media is on your case. I doubt they were much bothered about this being an effective trickle up taxpayer subsidy - that's the effect though.

I'd really like to think paying market leading rates in the short term was a cunning plan to lower borrowing costs over the long term but I'm putting that idea in the category of unlikely.

polymaff

NS&I said:

In July this year, NS&I’s Net Financing target for 2020-21 was revised from £6 billion (+/- £3 billion) to £35 billion (+/- £5 billion) to reflect the Government’s funding requirements due to the Covid-19 pandemic. In Q1 2020-21 (April-June), NS&I saw inflows of £19.9 billion and delivered £14.5 billion of Net Financing. Demand for NS&I products has remained at similarly high levels during Q2 (July-September).

Which leads one to wonder when the target was reduced - and was the July change a poor/panic decision.

Sailtheworld

coachman12 said:

AS I thought----you cannot name any. Gilts are "near-cash" as you put it ( that means NOT cash); they are "as good as easy access" ( but they are NOT easy access are they ? ) ; UNTIL the crisis they paid reasonable yields ( didn't every institution ?).
Nope, no answer there. So we'll say d63 was correct shall we ----someone who obviously knows his onions.

I'm not super wealthy like what you is but I would've thought most of the super rich would consider gilts close enough to cash. It's easier to access the auctions directly and therefore you get a much clearer idea of cost / return than the plebs.

They also add some diversification because you're owed money directly rather than via NS&I. The risk is tiny but by investing via the NS&I you're almost certainly going to be a UK citizen - valuable information for the government if they have a debt problem because they might choose to give UK citizens preference (or vice versa!).

Perhaps something for your vast team of advisors to consider?

Thrugelmir

polymaff said:

NS&I said:

In July this year, NS&I’s Net Financing target for 2020-21 was revised from £6 billion (+/- £3 billion) to £35 billion (+/- £5 billion) to reflect the Government’s funding requirements due to the Covid-19 pandemic. In Q1 2020-21 (April-June), NS&I saw inflows of £19.9 billion and delivered £14.5 billion of Net Financing. Demand for NS&I products has remained at similarly high levels during Q2 (July-September).

Which leads one to wonder when the target was reduced - and was the July change a poor/panic decision.

The article goes on to say.

Today’s new target may be subject to further revision during the year, depending on the government finance requirement.

Premium bonds remain an attractive proposition. 

coachman12

Sailtheworld said:

coachman12 said:

AS I thought----you cannot name any. Gilts are "near-cash" as you put it ( that means NOT cash); they are "as good as easy access" ( but they are NOT easy access are they ? ) ; UNTIL the crisis they paid reasonable yields ( didn't every institution ?).
Nope, no answer there. So we'll say d63 was correct shall we ----someone who obviously knows his onions.

I'm not super wealthy like what you is but I would've thought most of the super rich would consider gilts close enough to cash. It's easier to access the auctions directly and therefore you get a much clearer idea of cost / return than the plebs.

They also add some diversification because you're owed money directly rather than via NS&I. The risk is tiny but by investing via the NS&I you're almost certainly going to be a UK citizen - valuable information for the government if they have a debt problem because they might choose to give UK citizens preference (or vice versa!).

Perhaps something for your vast team of advisors to consider?

But the point you are missing is that they are NOT cash and the discussion we were having on this thread before your arrival was about direct comparisons with NS&I, to which d63 provided the only correct answer. 
The risk you mention is so far fetched as to be in the realms of fantasy.
"Perhaps something for your vast team of advisors to consider?"-----I think not   
But many thanks for your contribution.

talexuser

If the putting off of any reduction because of the pandemic was intended to help people during the first wave, then the reduction now could well be too soon if the second wave continuous on course, and another round of lockdown wage subsidies are on the agenda with less activity and consequently no wages. 

polymaff

Thrugelmir said:

polymaff said:

NS&I said:

In July this year, NS&I’s Net Financing target for 2020-21 was revised from £6 billion (+/- £3 billion) to £35 billion (+/- £5 billion) to reflect the Government’s funding requirements due to the Covid-19 pandemic. In Q1 2020-21 (April-June), NS&I saw inflows of £19.9 billion and delivered £14.5 billion of Net Financing. Demand for NS&I products has remained at similarly high levels during Q2 (July-September).

Which leads one to wonder when the target was reduced - and was the July change a poor/panic decision.

The article goes on to say.
Today’s new target may be subject to further revision during the year, depending on the government finance requirement.
Premium bonds remain an attractive proposition. ....

.... except for the £50K limit.

Yes, indeed there could be more changes on the way, see

https://forums.moneysavingexpert.com/discussion/comment/77645787#Comment_77645787

The question will still be unanswered though. Was the July change a foolish panic? Has the more recent one be an over-reaction to the July one.

SNAFU. ...

d63

ns&i really really sorry . . .
https://www.thisismoney.co.uk/money/saving/article-8826131/NS-boss-really-really-sorry-meltdown.html

daveyjp

I can only assume this meltdown and changes to website and operations are why I have today received a cheque for a small win, rather than being invested into more bonds as per my instruction.

The account is nowhere near maximum number of bonds and the instruction has been in place for years.