The Lemon Fool

Thanks. I guess that is what must have happened.

I was debating whether it was worthwhile rolling over NS&I index-linked certificates now that the indexation is linked to CPI rather than RPI and the former is only 0.7% currently, added to the interest rate of 0.01%, tax free admittedly but I doubt if I shall have much if any taxable interest, after the allowance, this year anyway. I was debating whether it might be better to cash it in and buy the income bonds instead, which would of course guarantee that the rate would come down. One would have to buy a heck of a lot of bonds to produce any significant monthly income if it only adds up to £11.50 over the year. I would have thought it would be less than that if the interest is paid out monthly and the AER is 1.15% but my maths is useless these days.

Does anyone know if index-linked certs. are included in one's estate when calculating IHT which is looming large? I couldn't find anything about that on their website.

The value of one's estate is very volatile these days and takes a lot of time to calculate. What is the point of saving? I wish my grandchildren were older and I could gift them more money knowing it could straightaway go into buying their first home rather than unproductive savings or risky equities. I know from bitter experience how easy it is to lose money on shares, especially in times like these. I wonder what will happen to the 7 year rule re IHT. If only one had a crystal ball.

AF62 wrote:

Alaric wrote:

AF62 wrote:
Can you conceive of a scenario where the £85k guarantee is needed but there is still a functioning government?

A lot of money is placed with an under resourced organisation that proceeds to fall over, possibly due to fraud.

Even then, do you really think the government would not step in? They did with the Icelandic banks.

The Gov ' would very probably step in but .... just cos they have done it before don't mean they'll do it again. We are about to get hit with the biggest recession ever, the Gov' have borrowed heavily and we are entering uncharted waters. Rather than take a guess at what might happen if it all goes tits up id much rather have a cast iron guarantee that my money is 100% safe.

I think you are overlooking the enormous problem that's going to hit this country in the coming months. We are not looking at another 2008 economic crash......it's going to be far worse than that.

I'm doing the same and moving £60k from the Post Office to NS&I Income Bonds (at 1.1%) or Premium Bonds (notional 1.4%) although I'm still deciding whether to going all-in one or do a bit in each. Any thoughts?

This reminds me of 2008/2009 when everyone moved to NS&I only for them to drop their interest rates in response to the influx.

kiloran wrote:

richlist wrote:

mutantpoodle wrote:take care though
they currently taking 6 weeks to respond to applications due to 'unexpected workload and some odd staffing issues'

and when your letter gets to the top of the heap they seemingly dont liase with other N S and I divisons re signatures etc etc

so you asked to supply another signature.(witnessed)..and....back to bottom of the pile!


any rate reductions require 60 days notice......so once you are 'in' there is plenty time to find alternatives


though not easy!

I

That's not my experience. Just opened an income bond and they sorted it within 3 days......I didn't experience any delays whatsoever.

Probably depends if you already have an NS&I account, to which you are adding an Income Bond, or starting from square one.

--kiloran

well in my case have had index linked bonds for 20 years although none cashed in....and i did have a 6 week delay in a response

and repeated telephone calls to chase enlisited the reply that they had 'staffing issues' (ha ha) so a delay was reasonable
each time I was given the 'day' of which they were dealing with applications received

if you were dealt with in 3 days then they were lying to me

but its a call centre so only to expect a convenient and easy reply they just want rid and move on to next caller

richlist wrote:

AF62 wrote:

Alaric wrote:
A lot of money is placed with an under resourced organisation that proceeds to fall over, possibly due to fraud.

Even then, do you really think the government would not step in? They did with the Icelandic banks.

The Gov ' would very probably step in but .... just cos they have done it before don't mean they'll do it again. We are about to get hit with the biggest recession ever, the Gov' have borrowed heavily and we are entering uncharted waters. Rather than take a guess at what might happen if it all goes tits up id much rather have a cast iron guarantee that my money is 100% safe.

But my point was that if the government didn't / couldn't step in then we probably don't actually have a functioning government and society would have dissolved into anarchy, with your 'safe' paper money being quite a lot less useful than a 12 gauge and a case of baked beans.

With banks that get into trouble the Gov will always step in and guarantee £85K.
* The problem is when the individual has £185K deposited with the bank .....the Gov will only pay them £85K.
* With £185K deposited with NS&I & it being Gov run the individual would get paid the full £185K.

Would we ever see a scenario where the Gov didn't pay out their £85K guarantee.....answer = no
Would we ever see a scenario where the Gov didn't pay out a bank deposit of £185K in full.......answer = yes

Bouleversee wrote:Thanks. I guess that is what must have happened.

I was debating whether it was worthwhile rolling over NS&I index-linked certificates now that the indexation is linked to CPI rather than RPI and the former is only 0.7% currently, added to the interest rate of 0.01%, tax free admittedly but I doubt if I shall have much if any taxable interest, after the allowance, this year anyway. I was debating whether it might be better to cash it in and buy the income bonds instead, which would of course guarantee that the rate would come down. One would have to buy a heck of a lot of bonds to produce any significant monthly income if it only adds up to £11.50 over the year. I would have thought it would be less than that if the interest is paid out monthly and the AER is 1.15% but my maths is useless these days.

Does anyone know if index-linked certs. are included in one's estate when calculating IHT which is looming large? I couldn't find anything about that on their website.

Indexed Certificates are certainly included in estate for IHT purposes.

Although the current Income Bond rate is 1.16%, this is being temporarily artificially held high because of Covid. It was intended to reduce it to 0.7% but the cut was cancelled. I'm sure it will be reinstated, though 2 months' notice will be given.

richlist wrote:With banks that get into trouble the Gov will always step in and guarantee £85K.
* The problem is when the individual has £185K deposited with the bank .....the Gov will only pay them £85K.
* With £185K deposited with NS&I & it being Gov run the individual would get paid the full £185K.

Would we ever see a scenario where the Gov didn't pay out their £85K guarantee.....answer = no
Would we ever see a scenario where the Gov didn't pay out a bank deposit of £185K in full.......answer = yes

I think you are not imaginative enough.

If you can't imagine a scenario that the Gov didn't pay out their £85K guarantee then I suggest trying harder. And then I would ask what is the difference between the scenario you can imagine of where the Gov didn't pay out a bank deposit of £185K in full and ask what the difference is. Likely none.

Thanks, Dr BH. I thought that would probably be the case. Not much point in switching, however, if rate is likely to reduce, esp. since the penalty of wihdrawing from the certs. If cash were suddenly required amounts to little at those rates. A lousy rate is better than a capital loss so will just roll over while I look at,the big picture..

AF62 wrote:

richlist wrote:With banks that get into trouble the Gov will always step in and guarantee £85K.
* The problem is when the individual has £185K deposited with the bank .....the Gov will only pay them £85K.
* With £185K deposited with NS&I & it being Gov run the individual would get paid the full £185K.

Would we ever see a scenario where the Gov didn't pay out their £85K guarantee.....answer = no
Would we ever see a scenario where the Gov didn't pay out a bank deposit of £185K in full.......answer = yes

I think you are not imaginative enough.

If you can't imagine a scenario that the Gov didn't pay out their £85K guarantee then I suggest trying harder. And then I would ask what is the difference between the scenario you can imagine of where the Gov didn't pay out a bank deposit of £185K in full and ask what the difference is. Likely none.

The difference is the word guarantee.

It's similar to insurance only in this case its issued by the Gov'.....you take insurance for a particular risk and then expect it to pay your loss......which is exactly what they undertake to do.

Any trust issue you may personally have with the UK Gov' is a matter for you. Taking up their offer of a guarantee for your savings is of course entirely optional.

richlist wrote:The difference is the word guarantee.

And "guarantee" is just a word, which is all it would be if push came to shove and it was actually needed; a nice word but nothing else.

But push may not come to shove and if it were only push that guarantee would be worth having since otherwise the max would only be £85k.

i am of the view that a guarantee from the government would definitely be honoured

this issue is far more likely to be how long it might take them...or how long it would take the review quango set up to investigate etc etc
to honour that guarantee

as with insurance...its quick and easy to pay premiums...its nowhere near as quick and easy to collect on a claim

Bouleversee wrote:Thanks, Dr BH. I thought that would probably be the case. Not much point in switching, however, if rate is likely to reduce, esp. since the penalty of wihdrawing from the certs. If cash were suddenly required amounts to little at those rates. A lousy rate is better than a capital loss so will just roll over while I look at,the big picture..

I have quite a lot of index linked N S & I certs and I just let them roll over every three years. The interest is not great but at least there is some and there is no hassle, unlike the sort of discussion and issues mentioned on this thread. To me they are the ultimate backstop and since they are not offering them except to existing customers I reckon they are worth hanging on to. 100% guarantee from the Government as well.

Dod

Hi,

New NS&I Investment Bond accounts set up with no delay. Now to sort out moving from lesser accounts.

Ray.

mutantpoodle wrote:i am of the view that a guarantee from the government would definitely be honoured

this issue is far more likely to be how long it might take them...or how long it would take the review quango set up to investigate etc etc
to honour that guarantee

as with insurance...its quick and easy to pay premiums...its nowhere near as quick and easy to collect on a claim

The Gov' guarantee includes an undertaking to pay you within 7 days.

'''The Gov' guarantee includes an undertaking to pay you within 7 days.''

ah yes a guarntee from a government who interested in getting elected...once there...less interest all round

rest assured if ever asked to deliver there will be extenuating circumstances

mutantpoodle wrote:'''The Gov' guarantee includes an undertaking to pay you within 7 days.''

ah yes a guarntee from a government who interested in getting elected...once there...less interest all round

rest assured if ever asked to deliver there will be extenuating circumstances

This is getting very silly & is miles off the OP.

Just sayin’.

Hi PD

ok 'just saying' but....

nearly half the posts in the thread reference the £85000 Guarantee

my point was simply a respnse to one that said guarantee would pay in 7 days'

sorry if thats not relevant