The Lemon Fool

Does anyone know what the CPI indexation rate is likely to be approximately for certificates maturing in July? It would seem to be a good idea to renew the two I have or am I missing something but I don't think I'll be able to find out a definite figure before I have to notify NS&I whether I want to do that. I see I can vary the term from 3 to 5 years if I wish but I may not survive even for 3. Can they be inherited by heirs other than spouses? I expect it's all in the copious bumf which I don't have time to read a.t.m. Too many other urgent problems to deal with.

According to https://www.nsandi.com/ilsc-calculator:

if you took out or renewed an NS&I Index-Linked Savings Certificate on 1 July 2020 with a value of £1000, it now has a value of £1,211.90

You can plug your own details into the calculator to get a more accurate result.

Hope that helps

chas49

Thanks chas49. I'll have a look at that later. They gave me an estimated maturity value based on the May CPI figure but said they won't be able to let me know before I renew what the final rate will be on the expiry/renewal date. I see the interest rate is still 0.01% so one is taking a gamble on how long inflation stays high which in every other respect one doesn't want it to.

Bouleversee wrote:Thanks chas49. I'll have a look at that later. They gave me an estimated maturity value based on the May CPI figure but said they won't be able to let me know before I renew what the final rate will be on the expiry/renewal date. I see the interest rate is still 0.01% so one is taking a gamble on how long inflation stays high which in every other respect one doesn't want it to.

Well whether inflation stays high or not, the capital value will more or less retain its purchasing power (depending how you view CPI against RPI) Not much real interest though at 0.01%. Better than most other deposits though.

Dod

ILSCs can be transferred to your heirs. They can also be cashed in at any time (with a small penalty) so there is no reason not to renew them with inflation so high for now.

Parky wrote:ILSCs can be transferred to your heirs. They can also be cashed in at any time (with a small penalty) so there is no reason not to renew them with inflation so high for now.

Not any more (for ones renewed after the 23rd of July).

"Previously, we gave you access to your investment before the end of its term but charged a penalty equal to 90 days’ interest on any money you took out early plus you would lose a year’s index-linking on the whole Certificate. Now, once you’ve decided to renew a Certificate from 23 July 2023 onwards, you won’t have access to your money until the Certificate reaches the end of its new term."

https://www.nsandi.com/help/manage-your-savings/maturing-investments/index-linked-savings-certificates

viewtopic.php?f=52&t=39302

Bouleversee should maybe take a look at this thread which covers most of the points re NS & I Index linkers

Dod

mc2fool wrote:

Parky wrote:ILSCs can be transferred to your heirs. They can also be cashed in at any time (with a small penalty) so there is no reason not to renew them with inflation so high for now.

Not any more (for ones renewed after the 23rd of July).

"Previously, we gave you access to your investment before the end of its term but charged a penalty equal to 90 days’ interest on any money you took out early plus you would lose a year’s index-linking on the whole Certificate. Now, once you’ve decided to renew a Certificate from 23 July 2023 onwards, you won’t have access to your money until the Certificate reaches the end of its new term."

https://www.nsandi.com/help/manage-your-savings/maturing-investments/index-linked-savings-certificates

Thanks for drawing attention to this information, issued just this month. So Boulversee has just a month to cash in her certificates early if she wishes to. I did not see any changes in the ability to transfer certificates to heirs.

So let's say I renew my certificates for 3 years when they mature on 20 and 21 July 2023, keep them for a year but by the end of that year CPI has reduced or maybe I just need the dosh (assuming I am still here) so having renewed them and had interest and indexation added on renewaI I decide to cash one or both in shortly after the start of the 2nd year. The interest lost since renewal would be negligible and if I did it soon after renewal the CPI addition wouldn't amount to much either, especially if CPI was dropping. Isn't that the way to play it, or are they saying they will take back the interest and indexation added at renewal for the year up to then?

It doesn't say anything about what happens if you die after renewal which would be useful to know.

Edited.

Bouleversee wrote:So let's say I renew my certificates for 3 years when they mature on 20 and 21 July 2023, keep them for a year but ..... decide to cash one or both in shortly after the start of the 2nd year.

Edited.

Apparently you won't be able to do that any more ...see above posts.

Parky wrote:

Bouleversee wrote:So let's say I renew my certificates for 3 years when they mature on 20 and 21 July 2023, keep them for a year but ..... decide to cash one or both in shortly after the start of the 2nd year.

Apparently you won't be able to do that any more ...see above posts.

As an aside (and as a somewhat jealous non-holder of these things) DAK why NS&I feels obligated to continue to offer this deal? Particularly since every other financial institution routinely withdraws any product that becomes too much of a good deal?

Parky wrote:

Bouleversee wrote:So let's say I renew my certificates for 3 years when they mature on 20 and 21 July 2023, keep them for a year but ..... decide to cash one or both in shortly after the start of the 2nd year.

Edited.

Apparently you won't be able to do that any more ...see above posts.

These dates occur before 23 July and so it would seem that the old terms apply such that they could be cashed in early subject to the loss of 90 days interest.

Dod

Lootman wrote:

Parky wrote:Apparently you won't be able to do that any more ...see above posts.

As an aside (and as a somewhat jealous non-holder of these things) DAK why NS&I feels obligated to continue to offer this deal? Particularly since every other financial institution routinely withdraws any product that becomes too much of a good deal?

I have no idea but the 'good deal' will not be quite so good after 23 July in that we will lose some flexibility to cash in early. I will hold on to mine though as I have for the past 30 years or so.

Dod

Dod101 wrote:

Parky wrote:
Apparently you won't be able to do that any more ...see above posts.

These dates occur before 23 July and so it would seem that the old terms apply such that they could be cashed in early subject to the loss of 90 days interest.

Dod

Exactly, so maybe I should elect to renew for 5 years (in fact one is for that long) unless they can change the rules retrospectively. Could be a trap to lock you in and then make it less of a good deal so maybe I should reduce that one to 3 years. IIRC they didn't use to let you change the duration at renewal.

Bouleversee wrote:

Dod101 wrote:
These dates occur before 23 July and so it would seem that the old terms apply such that they could be cashed in early subject to the loss of 90 days interest.

Dod

Exactly, so maybe I should elect to renew for 5 years (in fact one is for that long) unless they can change the rules retrospectively. Could be a trap to lock you in and then make it less of a good deal so maybe I should reduce that one to 3 years. IIRC they didn't use to let you change the duration at renewal.

I roll mine over for 3 years but that is because I have got them such that I have a couple or more coming up each year. Maybe more important now if we are not able to cash them in mid term to retain some flexibility.

Dod

Bouleversee wrote:Exactly, so maybe I should elect to renew for 5 years (in fact one is for that long) unless they can change the rules retrospectively. Could be a trap to lock you in and then make it less of a good deal so maybe I should reduce that one to 3 years. IIRC they didn't use to let you change the duration at renewal.

There's no rate advantage for 5 year over 3 year ones, and indeed hasn't been for quite a while, so I changed from 5 years to 3 for the last few renewals. If 5 year renewals become the better of the two at some point I'll consider switching back to them but as things stand there's no advantage over 3 year ones.

coming back to the OPs post question

you do not have to notify NS n I if you want to renew....they automatically renew for same duration unless you instruct otherwise

whatever rate of CPI is applied it will be far better than is available elsewhere...AND its TAX FREE
(it will still ba figure that doesnt figure in the lives of most peoples budgets)

and yes they can be left to heirs

mc2fool wrote:

Bouleversee wrote:Exactly, so maybe I should elect to renew for 5 years (in fact one is for that long) unless they can change the rules retrospectively. Could be a trap to lock you in and then make it less of a good deal so maybe I should reduce that one to 3 years. IIRC they didn't use to let you change the duration at renewal.

There's no rate advantage for 5 year over 3 year ones, and indeed hasn't been for quite a while, so I changed from 5 years to 3 for the last few renewals. If 5 year renewals become the better of the two at some point I'll consider switching back to them but as things stand there's no advantage over 3 year ones.

I changed all mine to 5 years just in case they withdrew the right to roll them over. I'm not sure that they will because then over the next five years they would have to repay billions of pounds to certificate holders.
What they have done though will IMHO force a gradual withdrawal of certificates. For example over the next five years I am now likely to withdraw one of my certificates, whether I need to or not, so that I maintain my emergency fund, which previously was comprised partly by the ilscs.
This is another major betrayal by the Swine.

CliffEdge wrote:What they have done though will IMHO force a gradual withdrawal of certificates. For example over the next five years I am now likely to withdraw one of my certificates, whether I need to or not, so that I maintain my emergency fund, which previously was comprised partly by the ilscs.
This is another major betrayal by the Swine.

Yes - I think you are correct about the withdrawal of certificates for those who have relied on them as an emergency fund. And what I find most objectionable is that this will hit chiefly the less wealthy section of the Savings Certificate community.
About half of my certificate savings will mature in 2023, but I'll continue to hold them. One of the maturing certificates is a 5 year certificate with RPI indexing - last year it attracted a 14.16% RPI return.

Bouleversee wrote:Does anyone know what the CPI indexation rate is likely to be approximately for certificates maturing in July? It would seem to be a good idea to renew the two I have or am I missing something but I don't think I'll be able to find out a definite figure before I have to notify NS&I whether I want to do that. I see I can vary the term from 3 to 5 years if I wish but I may not survive even for 3. Can they be inherited by heirs other than spouses? I expect it's all in the copious bumf which I don't have time to read a.t.m. Too many other urgent problems to deal with.

Just catching up with reading having been away for a few days.

The CPI value that NS&I use is lagged by 2 months, so the CPI figure for a certificate maturing in July will be the published rate for May (Consumer price inflation for May 2023 was released on 21 June 2023 (https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/previousReleases))

The default action for maturing ILSCs is to automatically roll over into the same available type (term) of ILSC. There should be a maturity value in the letter that NS&I sent, which can have a provisional value for the CPI depending on how early in the month i.e. whether the CPI has been issued for that moment IYSWIM.

ILSC can be passed on intact on the death of the holder, presumably according to the terms of the will, like any other of the deceased's assets. That's my experience anyway (when I was exor for my mother, who had some ILSCs), but IANAL, and I believe it's subject to the discretion of the director of NS&I (I can't lay my hands of the wording that I based this on for the moment), so like other things that are subtly changing at the moment with ILSCs, who knows what will happen.
As to whether the next generation will appreciate or understand ILSCs, who knows. They're a bit of a niche product now. And as others have noted on this thread, they are probably being quietly made harder and harder to hold ...