NSI Index linked bond value not changing for 5 months??

Brilley

Hi all, just curious really. I think I understand the way these bonds work, (or at least IO thought I did??), and each month I go on the NSI website and check the current values.

I have a few of these bonds, and pretty much every month the values change, sometimes up, sometimes down, and occasionally the value does not change for a couple of months.

However I have one 5 year bond taken out in 2021 that has not seen it's value change for the last 5 months??

I can't believe we had 5 months of "zero inflation", so just looking for an explanation really…

..many thanks…

masonic

CPI has been pretty flat over the last few months: http://www.wolfbane.com/cpi.htm

x44

NSI does not sell any index linked products currently. So are these old index linked savings certificates which are rolled over on expiry by default into new certificates which still can be done although they are no longer on general sale?

'Inflation' as declared is calculated over the change in index over a total year, not the month by month change.

NSI use the CPI from the month or so prior to calculate the valuation.

The CPI index values for the 5 months prior to Feb are

Jan 26: 139.5, Dec 25:140.1, Nov 25: 139.5: Oct25: 139.8: Sept25: 139.3, Aug25: 139.3

Looks inded pretty static over the last 5 months 139.3 to 139.5

So yes it is quite possible for the month by month inflation figure to be quite low or even negative while the official "inflation" figure over the past year to be much higher. This also result sometimes in strange figures where some particular odd month a year ago affects the inflation figure a year ahead as the strange month's figure drops out of the 12 month cycle. If a month a year ago had very high inflation for example due to say food then its quite likely that the offical inflation in a years time will be lower than expected as the starting point is much higher than expected.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81946342#Comment_81946342

That Wolfbane page may ultimately give something close to the right answer, but caveats like "Compiled from various sources and standardised" are disconcertingly vague, so I'd have thought that the 'official' ONS figures used by NS&I and other government bodies would be a more valid data source when validating queries like this:

https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/february2026

masonic

https://forums.moneysavingexpert.com/discussion/comment/81946403#Comment_81946403

I wasn't aware the ONS rebased its primary CPI index to 2015, presumably some time after 2015. ILSC started using CPI in 2019 IIRC, and I didn't hold any at the time, so wouldn't be in a position to know whether they'd be using the 2005 base or 2015 base.

The RPI figures with base year 1987 = 100 are spot on. Likewise CPI was spot on when I last checked it against the then 2005 based ONS data (yes that was a long time ago). I expect there is a CPI series somewhere on the ONS page with the older 2005 base year, which may or may not be being maintained. I do remember being in a discussion with someone a while back who pulled out RPI data from the ONS with a much earlier base year. The main reason for "Compiled from various sources and standardised" is because there is a need to refactor some of the really old data to create a single continuous historic source for RPI.

For a rough approximation for "is no apparent change over the last 5 months reasonable", it seemed adequate.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81946426#Comment_81946426

Yes, it may well be that it's the ONS ones that have been 'standardised' and that the Wolfbane ones are technically a purer representation! I was just meaning that NS&I will be basing their calculations on the former, but any discrepancies are unlikely to be significant, especially in the context of the question asked in this thread…

hara____

Here is the ONS page containing the CPI indices used for valuation. When you get your annual statement, you'll see these indices quoted in the calculation for your certificate. I find this the most convenient link for checking things between statements:

https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/d7bt/mm23

Brilley

..many thanks for all the replies / explanations…appreciated.

junebaby

Our 5 year bonds come up for renewal next month. Not inspired to renew them.

Stubod

The downside if you renew them now, is that you can't take any money out during the term. (assume the gov. is trying to discourage renewals?). I have been taking some money out, then renewing for the minimum term of 3 years…

OldScientist

https://forums.moneysavingexpert.com/discussion/comment/81946995#Comment_81946995

Just for my interest - any particular reason? Over the last 5 years, if my calculations are correct, they ought to have risen by about 27% (annualised return of about 4.9%) which isn't too bad. Of course, future inflation is unknown.