NS&I Index Linked Savings

Daliah

Alice_Holt said:

I will be renewing mine for the maximum 5 years, based on the possibility that HMG might at some point end the ability to reinvest in further issues. At 7% it's expensive borrowing for HMG. 

I take it you mean it is expensive borrowing for the taxpayer 😎

talexuser

I've renewed twice for 5 years. It's an absolute no brainer for cash as long as you can do without the money short term. If you need it cash in just after an anniversary for no loss of interest. Effectively a one year fixed account for no loss of interest.

jamei305

I'm kinda annoyed that they keep creating new issues of these but only to an exclusive club of early adopters. I'm pretty sure it now amounts to indirect discrimination under the Equality Act 2010 as they are not available to anyone approximately under the age of 30.

brass_in_pocket

A Lifetime ISA is directly discriminatory to older people - You must be 18 or over but under 40 to open a Lifetime ISA. The government will add a 25% bonus to your savings, up to a maximum of £1,000 per year.
You can put in up to £4,000 each year, until you’re 50. You must make your first payment into your ISA before you’re 40.

Rollinghome

jamei305 said:

I'm kinda annoyed that they keep creating new issues of these but only to an exclusive club of early adopters. I'm pretty sure it now amounts to indirect discrimination under the Equality Act 2010 as they are not available to anyone approximately under the age of 30.

Bear in mind that there have been periods when CPI annual change rate has been below available retail savings rates. In 20/21 the rate was 0.20-0.30 at times, in 2015  minus 0.10,  and in 2009 minus 1.2  -  so some holders would have got zero linking in those years with the result that many cashed in their bonds. There can be good times and not so good times to hold NS&I IL bonds. The unusually big gap between savings rates and inflation makes this one of the very good times.

The bonds originally paid RPI with the understanding they would be renewable, but that was later changed to CPI on renewal. The government still uses RPI for some purposes, including calculating interest on student loans (RPI, or the BoE base rate plus 1%, whichever is lower).

MDMD

Rollinghome said:

jamei305 said:

I'm kinda annoyed that they keep creating new issues of these but only to an exclusive club of early adopters. I'm pretty sure it now amounts to indirect discrimination under the Equality Act 2010 as they are not available to anyone approximately under the age of 30.

Bear in mind that there have been periods when CPI annual change rate has been below available retail savings rates. In 20/21 the rate was 0.20-0.30 at times, in 2015  minus 0.10,  and in 2009 minus 1.2  -  so some holders would have got zero linking in those years with the result that many cashed in their bonds. There can be good times and not so good times to hold NS&I IL bonds. The unusually big gap between savings rates and inflation makes this one of the very good times.

The bonds originally paid RPI with the understanding they would be renewable, but that was later changed to CPI on renewal. The government still uses RPI for some purposes, including calculating interest on student loans (RPI, or the BoE base rate plus 1%, whichever is lower).

Not all of them have a BoE Bank Rate link.

Plan 2 loans are RPI plus 3%

https://www.gov.uk/guidance/how-interest-is-calculated-plan-2

kaMelo

MDMD said:

Rollinghome said:

jamei305 said:

I'm kinda annoyed that they keep creating new issues of these but only to an exclusive club of early adopters. I'm pretty sure it now amounts to indirect discrimination under the Equality Act 2010 as they are not available to anyone approximately under the age of 30.

Bear in mind that there have been periods when CPI annual change rate has been below available retail savings rates. In 20/21 the rate was 0.20-0.30 at times, in 2015  minus 0.10,  and in 2009 minus 1.2  -  so some holders would have got zero linking in those years with the result that many cashed in their bonds. There can be good times and not so good times to hold NS&I IL bonds. The unusually big gap between savings rates and inflation makes this one of the very good times.

The bonds originally paid RPI with the understanding they would be renewable, but that was later changed to CPI on renewal. The government still uses RPI for some purposes, including calculating interest on student loans (RPI, or the BoE base rate plus 1%, whichever is lower).

Not all of them have a BoE Bank Rate link.

Plan 2 loans are RPI plus 3%

https://www.gov.uk/guidance/how-interest-is-calculated-plan-2

For accuracy it's RPI plus up to 3% depending upon your circumstances. 

Rollinghome

Thanks to both for the updates.  Having never had a student loan and unlikely to be a student again, I tend not to keep up on that front.

Going back, it's interesting that a deal that, in real terms, only returns your original sum after five years plus interest of 0.01% pa is now seen as being outrageously generous.  It's hardly that of course, just that a return of 1% when savings are being "taxed" by inflation of 7% CPI / 9% RPI, (then taxed again by the exchequer if over the allowance) is an especially rotten deal.

There was a time when it was regarded as important to encourage thrift, with even our coinage being embossed with an image of the thrift plant. I don't envy anyone during these times of financial repression trying to save or invest to provide future security and avoidance of dependency on the state.

Albermarle

 I don't envy anyone during these times of financial repression trying to save or invest to provide future security and avoidance of dependency on the state.

Although a very low unemployment rate means more people have jobs than they did at many times in our history, so it is not all bad news .

talexuser

Low unemployment does not help much if the employment is in many low paid jobs. The UK savings rates are nothing to be proud of.
https://data.oecd.org/hha/household-savings.htm