NSANDI change rules on ILSCs & ban early withdrawal

Albermarle

FIREDreamer said:

I probably won’t renew them now, just use them to fill my ISA.

Tying money up for 3 or 5 years with no withdraw option for an unknown (albeit a real, just about) return doesn’t sound like a good idea.

The government forcing a soft closure of the product I suspect.

Good returns the last 2 years but all good things come to an end.

Not sure it will be very successful if that is the goal. Despite the new restrictions, I think people will be hanging on to them as they have done previously even when they were hardly returning anything. 

hallmark

Albermarle said:

FIREDreamer said:

I probably won’t renew them now, just use them to fill my ISA.

Tying money up for 3 or 5 years with no withdraw option for an unknown (albeit a real, just about) return doesn’t sound like a good idea.

The government forcing a soft closure of the product I suspect.

Good returns the last 2 years but all good things come to an end.

Not sure it will be very successful if that is the goal. Despite the new restrictions, I think people will be hanging on to them as they have done previously even when they were hardly returning anything. 

I think lots of people will renew without realising the change.  It takes effect in less than a week and almost nobody I know was aware of it until now.

A fairer change would have been to simply increase the penalty for early access. The fact they chose this instead demonstrates they want to make these as unattractive as possible.

This is actually the latest of many steps they've taken, (discontinuing new sales, changing the linking from RPI to CPI, reducing the "extra" interest to nothing).  Those were defensible though, this is not IMO.  They're fundamentally changing the nature of this investment.

Some people (who don't actually hold these) are saying it's no big deal.  Would they think that if any instantly accessible investments they hold suddenly changed their terms to "you cannot access your money for 5 years under any circumstances"?

friolento

hallmark said:

Albermarle said:

FIREDreamer said:

I probably won’t renew them now, just use them to fill my ISA.

Tying money up for 3 or 5 years with no withdraw option for an unknown (albeit a real, just about) return doesn’t sound like a good idea.

The government forcing a soft closure of the product I suspect.

Good returns the last 2 years but all good things come to an end.

Not sure it will be very successful if that is the goal. Despite the new restrictions, I think people will be hanging on to them as they have done previously even when they were hardly returning anything. 

I think lots of people will renew without realising the change.  It takes effect in less than a week and almost nobody I know was aware of it until now.

A fairer change would have been to simply increase the penalty for early access. The fact they chose this instead demonstrates they want to make these as unattractive as possible.

This is actually the latest of many steps they've taken, (discontinuing new sales, changing the linking from RPI to CPI, reducing the "extra" interest to nothing).  Those were defensible though, this is not IMO.  They're fundamentally changing the nature of this investment.

Some people (who don't actually hold these) are saying it's no big deal.  Would they think that if any instantly accessible investments they hold suddenly changed their terms to "you cannot access your money for 5 years under any circumstances"?

Correct me if I am wrong - the way I understand it, the new rules only apply to renewals. It's therefore no sudden change to existing T&Cs. If the last renewal is anything to go by, they tell you quite clearly what the applicable T&Cs are going forward. If anyone chooses to ignore those T&Cs and later finds they don't suit them, they have only themselves to blame.

I do hold ILSCs myself, and would renew for 3 years despite the worsened T&Cs if I mine were up for renewal right now. My earliest are not due for renewal until well into 2026, though, so I will make a decision as and when.

hallmark

lcooper said:

hallmark said:

Albermarle said:

FIREDreamer said:

I probably won’t renew them now, just use them to fill my ISA.

Tying money up for 3 or 5 years with no withdraw option for an unknown (albeit a real, just about) return doesn’t sound like a good idea.

The government forcing a soft closure of the product I suspect.

Good returns the last 2 years but all good things come to an end.

Not sure it will be very successful if that is the goal. Despite the new restrictions, I think people will be hanging on to them as they have done previously even when they were hardly returning anything. 

I think lots of people will renew without realising the change.  It takes effect in less than a week and almost nobody I know was aware of it until now.

A fairer change would have been to simply increase the penalty for early access. The fact they chose this instead demonstrates they want to make these as unattractive as possible.

This is actually the latest of many steps they've taken, (discontinuing new sales, changing the linking from RPI to CPI, reducing the "extra" interest to nothing).  Those were defensible though, this is not IMO.  They're fundamentally changing the nature of this investment.

Some people (who don't actually hold these) are saying it's no big deal.  Would they think that if any instantly accessible investments they hold suddenly changed their terms to "you cannot access your money for 5 years under any circumstances"?

Correct me if I am wrong - the way I understand it, the new rules only apply to renewals. It's therefore no sudden change to existing T&Cs. If the last renewal is anything to go by, they tell you quite clearly what the applicable T&Cs are going forward. If anyone chooses to ignore those T&Cs and later finds they don't suit them, they have only themselves to blame.

I do hold ILSCs myself, and would renew for 3 years despite the worsened T&Cs if I mine were up for renewal right now. My earliest are not due for renewal until well into 2026, though, so I will make a decision as and when.

I think your understanding is correct. However I'm not talking about people who ignore the Ts&Cs I'm talking about people who assume these are essentially the same as always and just let them rollover like they've always done before. It's not intuitive to think such a substantial change might have occurred and I guarantee it'll catch some people out.

It's easy to argue everybody should read Ts&Cs but in reality nobody in the world does all of the time.  The 100-page Ts&Cs you're expected to read on a phone then agree to whenever big tech change something or you signup to some new service for example.

phillw

hallmark said:

Disgusting IMO and clearly NSANDI desperately trying to find ways of making what are currently a great investment less desirable so that people cash them out.

Who do you think should pay for your "great investment"?

coyrls

Index linked gilts are currently a better investment than NS&I index linked certificates.  The Gilts are linked to RPI rather than CPI and offer a higher rate above RPI than the certificates do above CPI, based on current gilt prices.  The Gilts are also liquid although you may not get the full inflation linked return if you sell before maturity.

friolento

hallmark said:

lcooper said:

hallmark said:

Albermarle said:

FIREDreamer said:

I probably won’t renew them now, just use them to fill my ISA.

Tying money up for 3 or 5 years with no withdraw option for an unknown (albeit a real, just about) return doesn’t sound like a good idea.

The government forcing a soft closure of the product I suspect.

Good returns the last 2 years but all good things come to an end.

Not sure it will be very successful if that is the goal. Despite the new restrictions, I think people will be hanging on to them as they have done previously even when they were hardly returning anything. 

I think lots of people will renew without realising the change.  It takes effect in less than a week and almost nobody I know was aware of it until now.

A fairer change would have been to simply increase the penalty for early access. The fact they chose this instead demonstrates they want to make these as unattractive as possible.

This is actually the latest of many steps they've taken, (discontinuing new sales, changing the linking from RPI to CPI, reducing the "extra" interest to nothing).  Those were defensible though, this is not IMO.  They're fundamentally changing the nature of this investment.

Some people (who don't actually hold these) are saying it's no big deal.  Would they think that if any instantly accessible investments they hold suddenly changed their terms to "you cannot access your money for 5 years under any circumstances"?

Correct me if I am wrong - the way I understand it, the new rules only apply to renewals. It's therefore no sudden change to existing T&Cs. If the last renewal is anything to go by, they tell you quite clearly what the applicable T&Cs are going forward. If anyone chooses to ignore those T&Cs and later finds they don't suit them, they have only themselves to blame.

I do hold ILSCs myself, and would renew for 3 years despite the worsened T&Cs if I mine were up for renewal right now. My earliest are not due for renewal until well into 2026, though, so I will make a decision as and when.

I think your understanding is correct. However I'm not talking about people who ignore the Ts&Cs I'm talking about people who assume these are essentially the same as always and just let them rollover like they've always done before. It's not intuitive to think such a substantial change might have occurred and I guarantee it'll catch some people out.

It's easy to argue everybody should read Ts&Cs but in reality nobody in the world does all of the time.  The 100-page Ts&Cs you're expected to read on a phone then agree to whenever big tech change something or you signup to some new service for example.

The only valid complaint we could have is if we were not given all the information at renewal time. You are no doubt correct that some people will choose to ignore that information but they can only blame themselves if they do. 

hallmark

I don't think anybody will choose to ignore it as such, I think there'll be lots of people who don't think to check the Ts&Cs, especially since some of them will have renewed these may times over in the past and will assume (incorrectly) not much has changed, or at least not something this fundamental to the product.

masonic

hallmark said:

I don't think anybody will choose to ignore it as such, I think there'll be lots of people who don't think to check the Ts&Cs, especially since some of them will have renewed these may times over in the past and will assume (incorrectly) not much has changed, or at least not something this fundamental to the product.

Until we see the contents of the renewal communications, there is no way of knowing how clear it will be that the product has changed. I don't recall seeing many complaints about people not knowing about the change of inflation measure. NS&I could make this change sufficiently prominent that it will not be missed.

Hattie627

The last big change to ILSC was the return being linked to CPI instead of RPI. I remember when I got the renewal papers at the first renewal after the change, there was a separate leaflet in VERY BOLD PRINT saying that there was a major change and that you MUST READ BEFORE RENEWING. The change was repeated SEVERAL TIMES in the renewal papers. Short of saying that NS&I can NEVER change the terms for those renewing, I don't see what more they could have done. I expect that the forthcoming change to renewed certificates from 23 July onwards will be EVEN MORE CLEARLY HIGHLIGHTED.