No sign of new NS&I Index Linked Savings Certificates

01st May 2012

National Savings & Investments (NS&I) has confirmed that it is not expecting to re-introduce the hugely popular Index Linked Savings Certificates anytime before the end of its current financial year - so nothing before at least March 2013.

If you remember, back in February, we disclosed that the reason NS&I had dropped the rate on its Direct Saver account was because we had all been investing too much – far more than we’d taken out. As a result NS&I was trying to reduce the flow of money into its accounts. And this is the reason that it has made the decision to delay any new issue of the Index Linked certificates – they are simply too popular!

This news is very disappointing, given the fact that the Consumer Price Index (CPI) rose by 0.10% to 3.50% last month. Having said this, the Retail Prices Index (RPI) -  which is the inflation measurement used by the NS&I Index Linked Certificates - fell by 0.10% last month and currently stands at 3.60%. However the latest reports suggest that inflation (CPI) is now going to remain above 3% for at least the rest of the year which means that RPI is likely to stay relatively high too.

But for those lucky savers who hold previous issues, they have the opportunity to roll over into a new issue that is only available to existing NS&I Index Linked Savings Certificate customers. At the moment, the current issue is offering RPI plus 0.25% tax free. Savers can either choose to reinvest for three or five years, or if they do nothing they will simply be rolled over into the same term that has just matured.

Whilst hanging onto your NS&I Inflation Linked Bond might not be ideal for everyone, if you are lucky enough to have the option of reinvesting, it’s certainly something that should be considered, especially if you’re a taxpayer and particularly if you pay at the higher rates.

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