PDA

View Full Version : Index linked saving certificates are back



DimPrawn
12th May 2011, 12:20
NS&I - Index linked savings certificates (http://www.nsandi.com/savings-index-linked-savings-certificates)

By popular demand, Merv the Swerve must think inflation is going to fall.

:laugh

Fill yer boots!

Lockhouse
12th May 2011, 13:00
My FiL is 84 and I have power of attorney. Is this something I should be considering as an investment for him? I'm meeting his financial advisor this weekend.

DimPrawn
12th May 2011, 13:02
My FiL is 84 and I have power of attorney. Is this something I should be considering as an investment for him? I'm meeting his financial advisor this weekend.

RPI + 0.5, easy access to money, all tax free. I'd say it's worth a look.

SimonMac
12th May 2011, 13:04
I was listing to 5Live this morning and they were making a real hash of selling this, basically you only get the DIFFERENCE in inflation rather the actual Inflation, so its more like 2.5% AER than the 5% being bandied around.

Although its safe investment, guaranteed return and with a high threshold than a Cash ISA

Lockhouse
12th May 2011, 13:08
RPI + 0.5, easy access to money, all tax free. I'd say it's worth a look.

Cheers. Most of his cash is tied up in bonds, one of them has matured and we need to reinvest the cash. Any other (serious) suggestions for safe-ish investments that I can bring up with the IFA?

DimPrawn
12th May 2011, 13:08
I was listing to 5Live this morning and they were making a real hash of selling this, basically you only get the DIFFERENCE in inflation rather the actual Inflation, so its more like 2.5% AER than the 5% being bandied around.

Although its safe investment, guaranteed return and with a high threshold than a Cash ISA

They pulling that stunt again.

Last time they did they, saying you get RPI + x, when infact you get the change in RPI over the year + x.

Advertising Standards should be all over them like a rash.

Lockhouse
12th May 2011, 13:13
That's really shady tactics - that's not how it comes across at all. So if RPI goes down over the year you basically get nothing?

SimonMac
12th May 2011, 13:17
That's really shady tactics - that's not how it comes across at all. So if RPI goes down over the year you basically get nothing?

I think you are guaranteed the 0.5%

TimberWolf
12th May 2011, 13:48
And you believe the RPI figures?

EternalOptimist
12th May 2011, 13:55
Cheers. Most of his cash is tied up in bonds, one of them has matured and we need to reinvest the cash. Any other (serious) suggestions for safe-ish investments that I can bring up with the IFA?

sheesh man, I dont mean to be heartless, but think of the will. I did my mums estate last year and it was a bloody nightmare. If I had used a solicitor it would have cost us 15 - 18 k.
bear that in mind, profit and loss type of thing



:rolleyes:

doodab
12th May 2011, 14:00
Bit of a misunderstanding here I think. It's the actual index they look at, not the % change in the index over the last x months that the papers report as the RPI. If the RPI falls, that means we have (in theory) actual deflation, so you get the benefit of all your money back + 0.5% + everything got cheaper while you were waiting.

http://www.nsandi.com/files/asset/images/ilscdiagram.jpg

NS&I - Index linked savings certificates (http://www.nsandi.com/savings-index-linked-savings-certificates#06)

AtW
12th May 2011, 14:11
Bit of a misunderstanding here I think. It's the actual index they look at, not the % change in the index over the last x months that the papers report as the RPI. If the RPI falls, that means we have (in theory) actual deflation, so you get the benefit of all your money back + 0.5% + everything got cheaper while you were waiting.

:laugh

They will soon introduce new true inflation metric called: Light Inflation Estimation or LIE.

HTH

TimberWolf
12th May 2011, 14:34
Shows how far we've come when we get excited about a 0.5% return after 5 years.

alreadypacked
12th May 2011, 14:38
Shows how far we've come when we get excited about a 0.5% return after 5 years.

I don't remember who said it, but Premium Bonds were a better bet when interest rates are > 5%

Lockhouse
12th May 2011, 14:41
sheesh man, I dont mean to be heartless, but think of the will. I did my mums estate last year and it was a bloody nightmare. If I had used a solicitor it would have cost us 15 - 18 k.
bear that in mind, profit and loss type of thing

:rolleyes:

That's hopefully all taken care of. I'm joint executor and the will etc is all up-to-date. It would be nice if he had a few more years though before I have to worry about it!

Moose423956
12th May 2011, 14:42
I don't remember who said it, but Premium Bonds were a better bet when interest rates are > 5%

Exactly. I've got my full quota plus some in the kids' names, and I get a return of about £50-£100 per month. Plus there's the chance of winning the jackpot....

DimPrawn
12th May 2011, 15:28
Shows how far we've come when we get excited about a 0.5% return after 5 years.

Most people are excited that in 5 years time their currency might still exist.

:laugh

MarillionFan
12th May 2011, 19:07
It's the RPI. Neighbour has one and says it's quite good.

Lumiere
12th May 2011, 21:52
£15000 max, not worth the hassle imo

MarillionFan
12th May 2011, 21:55
£15000 max, not worth the hassle imo

5% RPI + 0.5% on £15k = £825 tax free for the year.

A days money. I agree.

DimPrawn
12th May 2011, 21:55
£15000 max, not worth the hassle imo

You can get them for your kids too and the mrs of course, so for some people here it might be a decent amount to stash away.

MarillionFan
12th May 2011, 21:57
You can get them for your kids too and the mrs of course, so for some people here it might be a decent amount to stash away.

Is it kids? Really?

DimPrawn
12th May 2011, 22:05
Is it kids? Really?

Yep, my 3 year old lad has £15K of Index Linked Certs (3 yr bonds - not available at the moment) and £30K of Premium Bonds too.

MarillionFan
12th May 2011, 22:13
Yep, my 3 year old lad has £15K of Index Linked Certs (3 yr bonds - not available at the moment) and £30K of Premium Bonds too.

Not sure about Premium bonds. Seems a waste of money. I bought Tarquin a couple of gold necklaces and soveriegn rings but he has trouble standing up in the cot when I do, so I;ve got him a personal trainer & some steriods to bulk him up. :eyes:

AtW
12th May 2011, 22:15
Yep, my 3 year old lad has £15K of Index Linked Certs (3 yr bonds - not available at the moment) and £30K of Premium Bonds too.

:laugh

DimPrawn
12th May 2011, 22:15
Not sure about Premium bonds. Seems a waste of money. I bought Tarquin a couple of gold necklaces and soveriegn rings but he has trouble standing up in the cot when I do, so I;ve got him a personal trainer & some steriods to bulk him up. :eyes:

Agree about the Premium Bonds, but wife thinks young Wayne Prawn might be "lucky".

:eyes

TimberWolf
12th May 2011, 22:15
Even if you believe the RPI figures and are happy with 0.5% return for a 5 year investment, what about the biggie: that the pound is going to be worth flip all in 5 years. Isn't the economic plan to inflate let savers pay?

DimPrawn
12th May 2011, 22:17
Even if you believe the RPI figures and are happy with 0.5% return for a 5 year investment, what about the biggie: that the pound is going to be worth flip all in 5 years. Isn't the economic plan to inflate let savers pay?

Yep, hence why I've got small change in these things and close to a million in gold and shares.

AtW
12th May 2011, 22:19
Agree about the Premium Bonds, but wife thinks young Wayne Prawn might be "lucky". :eyes

I guess she knows who is his father then...

AtW
12th May 2011, 22:20
Yep, hence why I've got small change in these things and close to a million in gold and shares.

Close to a million? That means LESS than a million then! :laugh

MarillionFan
12th May 2011, 22:21
I guess she knows who is his father then...

I doubt it. I heard it was dark and they took turns.:laugh

AtW
12th May 2011, 22:23
I doubt it. I heard it was dark and they took turns.:laugh

:rollin:

You are very mean MF...

DimPrawn
12th May 2011, 22:23
Close to a million? That means LESS than a million then! :laugh

The problem with just being just a millionaire is everytime I buy something, I'm not a millionaire anymore.

:tantrum:

AtW
12th May 2011, 22:26
The problem with just being just a millionaire is everytime I buy something, I'm not a millionaire anymore.

It's ok mate, we don't hate you for your money! :hug:

AtW
12th May 2011, 22:42
The problem with just being just a millionaire is everytime I buy something, I'm not a millionaire anymore.

:tantrum:

Listen to me. You are not a millionaire. You are a pathetic, broken-minded, little bum. In your mind you think you're a millionaire but you're not.

HTH

DimPrawn
13th May 2011, 06:31
Listen to me. You are not a millionaire. You are a pathetic, broken-minded, little bum. In your mind you think you're a millionaire but you're not.

HTH

Thanks for clearing that up for me.

The nurse says I'm to get back to bed now, so catch you all laters.

:wave:

Lockhouse
13th May 2011, 07:17
So in all seriousness, I've got a reasonable amount of cash to invest on someone else's behalf, even though there are lots of mini-bubbles about, what's going to be a good bet for the next 5 years?

DimPrawn
13th May 2011, 07:44
So in all seriousness, I've got a reasonable amount of cash to invest on someone else's behalf, even though there are lots of mini-bubbles about, what's going to be a good bet for the next 5 years?

Index linked certs and cash isas and then in a couple of years spend the lot on BTL property at auction when the repos kick in so you'll have an income and capital appreciation when the next property bubble blows up.

MarillionFan
13th May 2011, 07:52
So in all seriousness, I've got a reasonable amount of cash to invest on someone else's behalf, even though there are lots of mini-bubbles about, what's going to be a good bet for the next 5 years?

The best on the market is a bond at 5.05% with Birmingham - (scroll to bottom)

Find & Compare Fixed Rate Bonds | moneysupermarket.com (http://www.moneysupermarket.com/savings/fixed-rate-bonds/?source=GOO-00023606&Keywords=5+year+bond&Phrase&p=0&ef_id=cgRNzOKXKRkAAAw3:20110513074943:s)

He could take a monthly interest and top his income up or leave it to accumulate. The monthly interest could be paid into his current account as opposed to back into the bond. Now interest rates may go up. If they go up a lot then take the penalty in a few years and move to a higher account.

DimPrawn
13th May 2011, 08:10
The best on the market is a bond at 5.05% with Birmingham - (scroll to bottom)

Find & Compare Fixed Rate Bonds | moneysupermarket.com (http://www.moneysupermarket.com/savings/fixed-rate-bonds/?source=GOO-00023606&Keywords=5+year+bond&Phrase&p=0&ef_id=cgRNzOKXKRkAAAw3:20110513074943:s)

He could take a monthly interest and top his income up or leave it to accumulate. The monthly interest could be paid into his current account as opposed to back into the bond. Now interest rates may go up. If they go up a lot then take the penalty in a few years and move to a higher account.

Tax man takes his chunk though.

MarillionFan
13th May 2011, 08:18
Tax man takes his chunk though.

Depends on how much incomr the OPs 'grandad' has. If you'd read he said he had a bond coming up, so
even with an ISA he could only move 5k

Lockhouse
13th May 2011, 08:43
Thanks for the replies - it's for my my father-in-law. It's a significant amount of cash - he doesn't have an ISA for this year yet. I was thinking of ISA, NS&I 15K and that's just for starters. I'm sure the IFA we're seeing Saturday will suggest things as well. I've been caught before buying high commission financial products that have lost money in real terms. Surprisingly as it's not my own cash I'm inclined to be much more conservative.

Is there a way of investing outside of the £ so that I'm hedged when it collapses (apart from gold)?

DimPrawn
13th May 2011, 10:29
Thanks for the replies - it's for my my father-in-law. It's a significant amount of cash - he doesn't have an ISA for this year yet. I was thinking of ISA, NS&I 15K and that's just for starters. I'm sure the IFA we're seeing Saturday will suggest things as well. I've been caught before buying high commission financial products that have lost money in real terms. Surprisingly as it's not my own cash I'm inclined to be much more conservative.

Is there a way of investing outside of the £ so that I'm hedged when it collapses (apart from gold)?

You could buy foreign defensive stocks priced in USD, EUR or whatever you fancy that pay a regular and reasonable dividend. You could buy foreign bonds and gilts too. I would still buy gold however after the latest selloff looks like it's finished as USA and UK are still likely to solve their debt problems by printing more money. Gold is easy to trade, very liquid market with low transaction costs and you can sell into other currencies too.

Oh, and stick some money into Zopa, as the returns are very good and the risk is low.

DimPrawn
13th May 2011, 13:13
Thousands scramble to register for the new 9% savings rate | Mail Online (http://www.dailymail.co.uk/news/article-1386315/Thousands-scramble-register-new-9-savings-rate.html)

http://i.dailymail.co.uk/i/pix/2011/05/13/article-1386315-0C07F60300000578-688_634x414.jpg

Lumiere
16th May 2011, 18:04
5% RPI + 0.5% on £15k = £825 tax free for the year.

A days money. I agree.

more like £200-£300 if the money is already a part of an offset mortgage

and if interest rates go up the difference will become marginal, and your money is not locked up for 5 years as a bonus

pass

Olly
16th May 2011, 18:19
errrr..the money isn't locked up for 5 years! I'm glad it said that in the Mail though as it's going to take a few days to jig things around so I've got 15K in my current account to pay for it before they're sold out

AtW
16th May 2011, 18:26
This seems to suggest rates would have to go up and fast - either that or they are desperate for cash.

MarillionFan
16th May 2011, 18:40
There's a really good article in Times Yesterdays money section on how to only pay 20% tax on 78k if you're retired. See if you can find
A copy.

TimberWolf
16th May 2011, 18:41
This seems to suggest rates would have to go up and fast - either that or they are desperate for cash.

Maybe they don't want people to hold gold, etc, so that they can part people from their savings painlessly, without them noticing as the pound slides. Their economic tools loose effectiveness if people don't hold the currency.

AtW
16th May 2011, 18:48
There is no economic reason to borrow under such high interest rate when you can print money or borrow them under much lower. They might be doing it to say later - look, we've tried to "help" you: £15k is nothing anyway, it won't help pensioners much.