Gilts as Fixed Savings Proxy - Probably too late!

ChilliBob

Thanks Coyrls, I guess what I don't get is what is RPI in this instance? Is it simply RPI at maturity date? An average across the months held? - cumulative per month since holding date or what?

I gusss, thinking about it, it must be the last? Some of these linkers have maturity of say 2065.. So that must be cumulative since inception 

GeoffTF

Inflationary increases beyond 2030 will be CPIH, not RPI:

https://ehs.org.uk/index-linked-gilts-and-the-end-of-rpi/

The BOE implied inflation rates did not properly allow for this when I last looked.

ChilliBob

Interesting, thanks Geoff, as this stage in thinking much shorter term really. I'll look into that though, good to know for fur future! 

GeoffTF

ChilliBob said:

Interesting, thanks Geoff, as this stage in thinking much shorter term really. I'll look into that though, good to know for fur future! 

You will be stung with the spread if you go for a very short term. I have got Treasury 0.125% IL 2029 which is not too bad. New style linkers have a clean and dirty price and have to be dealt on the phone. Old style linkers have a single price that includes indexation. I have traded them online, but not in recent years. You may get better prices online for small trades.