NS&I Index Linked Savings Certificates - Renew or Possible Alternatives?

Sun-Is-Fun

Have some NS&I Linked savings certificates coming up for renewal next month. I would have renewed but found out you now can't withdraw them until the fixed term ends. I might need to access that money before the new term would end, so this is a concern. Any suggestions what I could do with the money if I choose not to renew? Was thinking about premium bonds and personal pension contributions for some of it.

eskbanker

If you choose not to renew ILSCs then the fact that this is where the money came from is ultimately irrelevant and you're left with a standard generic 'where shall I save?' question, which, as ever, will depend on your objectives and timescales - pension contributions are often worthwhile but are obviously inaccessible unless you're over 55?  Your age, income, other assets, tax status, family, health, risk tolerance, etc, etc, can all influence decisions about what to do with your money too....

Stubod

I hav one due up at the end of the month. As there are no longer any options to witdraw early I have decided to take some cash, but have left £10k in at a reduced term of 3 years. ...just going to "spend" the cash on wine women and song, and just waste the rest.....

I am now of an age that I can't really wait 5 years, so for all the remaining ones I will be taking a mix of cash, and re-investing a proportion into 3 year bonds.

...and without knowing the OPs financial status I would premium bonds are probably as good as anything, but you really need to pump in "the max", or as near to it as you can. For smaller amounts I would just go with the best instant cash ISA you can find....(there are some reasonable rates abouty at the mo...)

Albermarle

Sun-Is-Fun said:

Have some NS&I Linked savings certificates coming up for renewal next month. I would have renewed but found out you now can't withdraw them until the fixed term ends. I might need to access that money before the new term would end, so this is a concern. Any suggestions what I could do with the money if I choose not to renew? Was thinking about premium bonds and personal pension contributions for some of it.

The suggestion normally made for questions like this is that to get a sensible answer you need to supply more info.

wmb194

10_66 said:

I've had money in an ILSC since 2016 and, on the whole, it's not been too bad.  I have to admit, I've never fully understood how they work, so I'm hoping someone can answer my question, please; last year the interest received was a little over £2,000, this year it's a little over £700.  Can someone explain why it's reduced so much?  I'm not complaining (at the moment!) as interest still works out at 6.76% over the last 3 years (into a 5 year period), which is much better than any of the notice ISA's (there's a 90 day loss of interest if withdrawals are made).

Because CPI rocketed and then tumbled.

https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/d7g7/mm23

10_66

Oops, sorry wmb194, I deleted my post at the same time you replied.  Apologies if this has caused any confusion.  Thank you for this chart.

GeoffTF

I have got some Issue 54, which can be cashed in. The NS&I says:

"You can also cash in before that, but we will deduct a penalty from your payment equivalent to 90 days’ interest on the amount cashed in. You will also lose the index-linking on your whole Certificate for that investment year."

https://www.nsandi.com/help/manage-your-savings/maturing-investments/index-linked-savings-certificates

What is "the investment year"? Does it begin on the anniversary of renewing the certificates? Since the interest rate is only 0.01%, that would mean that I could get out essentially Scot free if I cashed in on the day after the anniversary. Has anyone done this? The certificates are now such a poor deal in relation to index linked gilts that I am thinking about getting out at the first good opportunity.

ColdIron

GeoffTF said:

What is "the investment year"? Does it begin on the anniversary of renewing the certificates? Since the interest rate is only 0.01%, that would mean that I could get out essentially Scot free if I cashed in on the day after the anniversary.

Yes and yes. I have Issue 54 as well, if you log in and look at your account it will confirm it

10_66

ColdIron said:

GeoffTF said:

What is "the investment year"? Does it begin on the anniversary of renewing the certificates? Since the interest rate is only 0.01%, that would mean that I could get out essentially Scot free if I cashed in on the day after the anniversary.

Yes and yes. I have Issue 54 as well, if you log in and look at your account it will confirm it

Apologies for double checking, but do you not still lose the equivalent of 90 days interest on the amount withdrawn?

ColdIron

10_66 said:

ColdIron said:

GeoffTF said:

What is "the investment year"? Does it begin on the anniversary of renewing the certificates? Since the interest rate is only 0.01%, that would mean that I could get out essentially Scot free if I cashed in on the day after the anniversary.

Yes and yes. I have Issue 54 as well, if you log in and look at your account it will confirm it

Apologies for double checking, but do you not still lose the equivalent of 90 days interest on the amount withdrawn?

Yes but at 0.01% AER (Annual Equivalent Rate) you're not going to miss out on much. These days ILSCs are all about the index linking and the interest is irrelevant. This year my interest was £2.32. You should be careful of the timing so as not to miss out on the index linking

10_66

ColdIron said:

10_66 said:

ColdIron said:

GeoffTF said:

What is "the investment year"? Does it begin on the anniversary of renewing the certificates? Since the interest rate is only 0.01%, that would mean that I could get out essentially Scot free if I cashed in on the day after the anniversary.

Yes and yes. I have Issue 54 as well, if you log in and look at your account it will confirm it

Apologies for double checking, but do you not still lose the equivalent of 90 days interest on the amount withdrawn?

Yes but at 0.01% AER (Annual Equivalent Rate) you're not going to miss out on much. These days ILSCs are all about the index linking and the interest is irrelevant. This year my interest was £2.32. You should be careful of the timing so as not to miss out on the index linking

I'm sorry ColdIron, would you mind expanding on the timing of the index linking, please?  I know they add this on the anniversary of when the account was opened.