Index linked savings certs renewal

caper7

The perennial question of whether to renew a maturing certificate.

I'm aware of the new being locked in for the whole 3/5 years aspect.

You can get savings accounts with higher rates currently, even factoring in a 22% basic rate tax, but only just. I am a basic rate taxpayer.

I know no one has a crystal ball, but I'd be interested in any thoughts about the direction of inflation, whether these certs are worth keeping etc...

masonic

As I've commented on many of the other ILSC threads, I can't see the attraction now that index linked gilts pay a positive real return above RPI and can be sold ahead of maturity if you have an emergency need for the money.

I generally think having some inflation protection in your low risk assets is a very good idea.

DRS1

I suspect many people who hold ILSCs would not be that comfortable buying index linked gilts.

I also suspect NS&I want to get rid of the ILSCs and so they are making them less and less attractive.

Being a contrary person that makes me want to keep them.

masonic

I was fairly uncomfortable the first time I bought an index linked gilt. The same is true of several things I've learned about through the forum and now seem rather routine.

Stubod

We decided to keep them, but due to them no longer allowing withdrawls we took a chunk of cash out before renewal, and changed them all to 3 years…

coyrls

https://forums.moneysavingexpert.com/discussion/comment/81993791#Comment_81993791

One argument for renewing is that it keeps the option open for further renewals, possibly at a time when index linked gilts offer a negative real return.

masonic

https://forums.moneysavingexpert.com/discussion/comment/81994536#Comment_81994536

Nothing would please me more than to see ILG prices rise to the point they are offering a negative real return again.