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  • FIRST POST
    • Hattie625
    • By Hattie625 16th Apr 19, 2:04 PM
    • 830Posts
    • 713Thanks
    Hattie625
    NS&I ILSC maturing May 2019
    • #1
    • 16th Apr 19, 2:04 PM
    NS&I ILSC maturing May 2019 16th Apr 19 at 2:04 PM
    My index-linked NS&I savings certificate matures in May 2019. It was originally 5 years from May 2011, then I renewed for 3 years in May 2016.

    Doh, I should have renewed for 5 years in May 2016. The 2019 renewal is at CPI inflation, not RPI inflation. If I'd renewed for 5 years in 2016 I would have got an additional 2 years index-linking at RPI.

    Anyway, too late to cry over a past mistake. The offer is again 3 or 5 years renewal, both at CPI, plus 0.01%, all return tax free.

    Question: now that the issue of CPI v RPI is no longer an issue, is there any point going for the 5 year term instead of 3 years? Depending on where inflation goes, there may be an advantage in not being tied in for 5 year. Any views please?
Page 1
    • IanManc
    • By IanManc 16th Apr 19, 5:01 PM
    • 812 Posts
    • 1,538 Thanks
    IanManc
    • #2
    • 16th Apr 19, 5:01 PM
    • #2
    • 16th Apr 19, 5:01 PM
    My index-linked NS&I savings certificate matures in May 2019. It was originally 5 years from May 2011, then I renewed for 3 years in May 2016.

    Doh, I should have renewed for 5 years in May 2016. The 2019 renewal is at CPI inflation, not RPI inflation. If I'd renewed for 5 years in 2016 I would have got an additional 2 years index-linking at RPI.

    Anyway, too late to cry over a past mistake. The offer is again 3 or 5 years renewal, both at CPI, plus 0.01%, all return tax free.

    Question: now that the issue of CPI v RPI is no longer an issue, is there any point going for the 5 year term instead of 3 years? Depending on where inflation goes, there may be an advantage in not being tied in for 5 year. Any views please?
    Originally posted by Hattie625
    I'd renew for five years, in case they decide to stop renewals altogether.
    • badger09
    • By badger09 16th Apr 19, 5:04 PM
    • 6,806 Posts
    • 6,400 Thanks
    badger09
    • #3
    • 16th Apr 19, 5:04 PM
    • #3
    • 16th Apr 19, 5:04 PM
    What is the penalty for early withdrawal on this rollover?

    What if they only offer 3 year renewal in 2022? Or no renewal at all
    • badger09
    • By badger09 16th Apr 19, 5:05 PM
    • 6,806 Posts
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    badger09
    • #4
    • 16th Apr 19, 5:05 PM
    • #4
    • 16th Apr 19, 5:05 PM
    I'd renew for five years, in case they decide to stop renewals altogether.
    Originally posted by IanManc
    So would I.
    • polymaff
    • By polymaff 16th Apr 19, 5:08 PM
    • 2,684 Posts
    • 1,226 Thanks
    polymaff
    • #5
    • 16th Apr 19, 5:08 PM
    • #5
    • 16th Apr 19, 5:08 PM
    There are many of us having to ponder this - even though we've been 5-year renewing in anticipation of this change for years.


    The funny thing is that the ONS has been rubbishing RPI for years - and recently they've been rubbishing CPI in favour of CPIH. Wait for the NGU - Never-goes-up - to be introduced..


    Seriously, though, ILSCs were - still are until the end of the month - a no-brainer. Now they're starting to look more like ISAs and Premium Bonds - of primary benefit to higher, or more, rate tax-payers.


    I wish that they'd sugared the pill a little by increasing the coupon.
    • ColdIron
    • By ColdIron 16th Apr 19, 5:13 PM
    • 5,119 Posts
    • 6,957 Thanks
    ColdIron
    • #6
    • 16th Apr 19, 5:13 PM
    • #6
    • 16th Apr 19, 5:13 PM
    Do you need the money in 3 years? If not it seems a bit of a no brainer. These things won't roll over for ever
    • ffacoffipawb
    • By ffacoffipawb 16th Apr 19, 5:21 PM
    • 2,646 Posts
    • 1,798 Thanks
    ffacoffipawb
    • #7
    • 16th Apr 19, 5:21 PM
    • #7
    • 16th Apr 19, 5:21 PM
    You can split it into 3 and 5 year portions. Useful if you think you may need some of the money early because if you cash in one portion it has no effect on the other, whereas partial encashment of a whole bond means loss of some interest on that part of the bond that isn't cashed in.
    Early Retirement in June 2019 (all being well)
    • Stubod
    • By Stubod 16th Apr 19, 5:51 PM
    • 556 Posts
    • 424 Thanks
    Stubod
    • #8
    • 16th Apr 19, 5:51 PM
    • #8
    • 16th Apr 19, 5:51 PM
    ..just rolled over ours, was a 3 year but opted to renew for 5 years. Seems to be the best choice of you don't need the money at the mo...
    • Hattie625
    • By Hattie625 16th Apr 19, 6:12 PM
    • 830 Posts
    • 713 Thanks
    Hattie625
    • #9
    • 16th Apr 19, 6:12 PM
    • #9
    • 16th Apr 19, 6:12 PM
    Thanks for all replies. I'm going for rollover for 5 years. You can cash in early without losing any benefit of indexing, providing you do it immediately after an anniversary date. The loss of 90 days interest at 0.01% pa is negligible.
    • speedyrite
    • By speedyrite 17th Apr 19, 11:11 AM
    • 136 Posts
    • 49 Thanks
    speedyrite
    Thanks for all replies. I'm going for rollover for 5 years. You can cash in early without losing any benefit of indexing, providing you do it immediately after an anniversary date. The loss of 90 days interest at 0.01% pa is negligible.
    Originally posted by Hattie625
    I’m not quite clear on how to “cash in early without losing any benefit of indexing”. Can you elaborate for me please?

    From the Summary box dated 1 May 2019 on NS&I website:

    “Can I withdraw my money?

    Yes, before the end of the term you can cash in all or part of your Certificate online, by phone or by post with no notice. We will deduct a penalty equal to 90 days’ interest on the amount you cash in. Also, you won’t earn any index-linking on the whole Certificate for the investment year in which you cash in, even if you only cash in part of your Certificate. You need to keep a balance of at least £100 to keep your Certificate open.

    At the end of the term you can cash in with no penalty. We’ll contact you about a month before to explain the options available at that time.”
    • polymaff
    • By polymaff 17th Apr 19, 11:13 AM
    • 2,684 Posts
    • 1,226 Thanks
    polymaff
    I’m not quite clear on how to “cash in early without losing any benefit of indexing”. Can you elaborate for me please?

    From the Summary box dated 1 May 2019 on NS&I website:

    “Can I withdraw my money?

    Yes, before the end of the term you can cash in all or part of your Certificate online, by phone or by post with no notice. We will deduct a penalty equal to 90 days’ interest on the amount you cash in. Also, you won’t earn any index-linking on the whole Certificate for the investment year in which you cash in, even if you only cash in part of your Certificate. You need to keep a balance of at least £100 to keep your Certificate open.

    At the end of the term you can cash in with no penalty. We’ll contact you about a month before to explain the options available at that time.”
    Originally posted by speedyrite

    So you cash in on day one of the investment year.
    • speedyrite
    • By speedyrite 17th Apr 19, 11:25 AM
    • 136 Posts
    • 49 Thanks
    speedyrite
    So you cash in on day one of the investment year.
    Originally posted by polymaff
    Ok understood, so that’s really the only opportunity to do so - once each year isn’t it - ILSC renewal would be no good if you got to say midway through any year, found that you needed to cash in and couldn’t wait until the next anniversary. Thanks for helping me see that more clearly.
    • polymaff
    • By polymaff 17th Apr 19, 11:47 AM
    • 2,684 Posts
    • 1,226 Thanks
    polymaff
    Ok understood, so that’s really the only opportunity to do so - once each year isn’t it - ILSC renewal would be no good if you got to say midway through any year, found that you needed to cash in and couldn’t wait until the next anniversary. Thanks for helping me see that more clearly.
    Originally posted by speedyrite

    I think that the point intended is that a 5 year bond is also a bit of a 1 year, 2 year, 3 year or 4 year bond, too - in terms of a need for easy access with minimal penalty.


    As for "no good" at the half-year point - that's up to the individual.
    Last edited by polymaff; 17-04-2019 at 11:57 AM.
    • AnotherJoe
    • By AnotherJoe 17th Apr 19, 11:56 AM
    • 13,409 Posts
    • 15,829 Thanks
    AnotherJoe
    Ok understood, so that’s really the only opportunity to do so - once each year isn’t it - ILSC renewal would be no good if you got to say midway through any year, found that you needed to cash in and couldn’t wait until the next anniversary. Thanks for helping me see that more clearly.
    Originally posted by speedyrite

    You'd still only lose out on that years CPI which is only about 2% so if you cashed in half way through thats 1%, if itw as say Feb or march, then 1/6% or other end of the year if it got to say October/November and you desperately needed the money and couldnt wait a month or two then you shouldn't be holding these bonds.
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • speedyrite
    • By speedyrite 17th Apr 19, 5:49 PM
    • 136 Posts
    • 49 Thanks
    speedyrite
    You'd still only lose out on that years CPI which is only about 2% so if you cashed in half way through thats 1%, if itw as say Feb or march, then 1/6% or other end of the year if it got to say October/November and you desperately needed the money and couldnt wait a month or two then you shouldn't be holding these bonds.
    Originally posted by AnotherJoe
    Yeah, I don’t actually hold them myself, but I know somebody who does for whom this info will be useful. Thanks for the comments on my query folks.
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