Index Linked Savings Certificate - renew or not?

10_66

I have an Index Linked Savings Certificate that’s due to mature next month (last renewed in 2021). I’m unsure whether to renew it again, especially as you can no longer make withdrawals from it.

The index linked return (and minimal interest) earned in 2022 was around 7.03%, 2023 was 10.07%, 2024 was 3.17% and 2025 was 2.64%. 2026 (going on February’s figure) should be around 3%, so the 5 year average will be around 5.18%. However, if the higher returns for 2022 and 2023 had been nearer the other years’ returns, then maybe a Cash ISA would’ve been more favourable than this. I really don’t know what to do.

wmb194

https://forums.moneysavingexpert.com/discussion/6664944/index-linked-savings-certificate-renew-or-not

Recent thread on this: see the posts from 10/04/26:

https://forums.moneysavingexpert.com/discussion/6468571/nsi-index-linked-savings-certificates/p3

Lack or access is the reason some people say they won't renew but another option to consider is buying index linked gilts instead, which can be sold at any time.

friolento

I am cashing mine in but don't let my decision influence yours.

10_66

Thank you for reply. I'm unfamiliar with IL gilts.

Albermarle

It depends partly on your overall financial position; you should/ can not just look at each decision in isolation.

For example if you have cash savings, you are relying on the interest rate.

If you have investments you are relying on the potential return

If you are investing in a pension, you are gaining from tax relief and investment returns.

If you have these index linked bonds, you are protected from inflation, which may or may not be greater than the previous options. Another way to do this is to use index linked gilts, but that is less simple ( for the inexperienced anyway)