NS&I's bonds withdrawal 'a bitter blow for savers'

Comments (3)

• Peter McLoughlin 2011-10-06 13:07:34
  My index-linked certificates have just matured showing a healthy return. I am told that I can leave them in for a further 3 years to show rates of return: Year 1 Inflation proofing +0.18%
  Year 2 '' '' +0.23%
  Year 3 '' '' +0.35%
  This looks very miserly when one compares it with what my previous investment earned. Is it still a worthwhile investment?
• van Johnson 2012-01-20 13:54:38
  The rates are not attractive, and "All" investors will lose one day of interest this leap year. We lost £19.18 in a leap year,and withdrew all savings permenantly.
• Keith [Editor] 2012-01-20 15:16:53
  Savings rates are certainly less attractive as we find ourselves with the unfortunate combination of long-term low base rates and high inflation.
  
  You may appreciate this article on our Finance Blog, which argues that inflation-linked bonds carry little provision (and poor returns) for lower inflation.
  
  Generally speaking, inflation-linked bonds have a single-purpose: to protect against the rise in the cost of living. But that does not guarantee excellent or "unbeatable" returns in any way. When inflation falls, the returns can pale significantly against other fixed-rate products.
  
  However, there is a product listed on Which4U that helps to insure against this. The story was just written up yesterday, and perhaps that will be of interest.
  
  Thanks for reading!