Ns&i Linkers To Relaunch

[Sledgehead]

Rumoured here yesterday, for a Martin Lewis 'skinny' : http://www.moneysavingexpert.com/news/banking/2011/03/nsi-inflation-beating-savings-to-return

and the article I found it in:

Budget 2011: National Savings inflation-beating products to be launched

[Pent Up]

Inflation to plummet?? Interest rates to surge??

Edited March 24, 2011 by Pent Up

[TheCountOfNowhere]

Inflation to plummet?? Interest rates to surge??

Pigs to fly ?

[martingale]

Inflation to plummet?? Interest rates to surge??

On the principle that the government hates savers this is my time line

(1) May: Ns&I linkers terms and conditions are changed to (no early withdrawal)

(2) August: BOE decides to raise rates by shock 1=0.5%

(4) September: BOE decides to raise rates by shock 1%

....

But if (1) doesn't happen then inflation will continue to soar ... So I'm thinking pile in.... 15k both 3y &5y terms

[Executive Sadman]

yorkshire BS, post office and british midshires already offer RPI trackers.

Not tax free admittedly, but for the paupers among us, better than nothing

http://www.moneysavingexpert.com/savings/savings-accounts-best-interest

[WageslaveX14]

yorkshire BS, post office and british midshires already offer RPI trackers.

Not tax free admittedly, but for the paupers among us, better than nothing

http://www.moneysavingexpert.com/savings/savings-accounts-best-interest

I think your capital is locked in for the full term with the private sector linkers. With NS&I, at least previously, you could withdraw your capital at any time.

[long time lurking]

Run out of cash again

[MinceBalls]

Run out of cash again

Or do they see potential future funding issues in the markets?

I can't imagine they are doing this for the good of the consumer

[Lagarde's Drift]

I don't understand this whole attachment to NS&I linkers. I withdrew mine in 2009 and put them into things which have returned me far far more - mostly due to the real rate of inflation which I believe to be much much higher than whatever the government are willing to publish.

That being said, it is better than sticking it in a Cash ISA or savings account.

[MC Fur Q]

The bond is linked to RPI, so when the HPC kicks in you could end up with a negative interest rate.

[Acid In The Punch Bowl]

The bond is linked to RPI, so when the HPC kicks in you could end up with a negative interest rate.

Yeah i was just thinking about that... Does that mean they are expecting HPC?

[General Congreve]

I don't understand this whole attachment to NS&I linkers. I withdrew mine in 2009 and put them into things which have returned me far far more - mostly due to the real rate of inflation which I believe to be much much higher than whatever the government are willing to publish.

That being said, it is better than sticking it in a Cash ISA or savings account.

Here, here. Index-linked to what the government LIES inflation is.

[Sledgehead]

I don't understand this whole attachment to NS&I linkers. I withdrew mine in 2009 and put them into things which have returned me far far more - mostly due to the real rate of inflation which I believe to be much much higher than whatever the government are willing to publish.

That being said, it is better than sticking it in a Cash ISA or savings account.

I think you'll find it's a nominal risk thing.

I'll wager your nominal capital is at risk in all these instruments you talk about. People have differing tolerances to risk. An oft quoted saying that springs to mind is : "Anyone can make a million is risky assets. All you need is a bull market and zero experience."

[WageslaveX14]

The bond is linked to RPI, so when the HPC kicks in you could end up with a negative interest rate.

The interest rate never goes negative on NS&I linkers. Even if RPI is minus 10%, you would still be making a positive return (they are RPI +x%, and if RPI is negative you get 0% +x%).

The reason everyone makes a fuss about NS&I linkers is that they are very low risk. Sure, there is the prospect of much higher gains elsewhere, but the risk profile is different. Most people don't want to gamble with house their house deposit.

[ccc]

I don't understand this whole attachment to NS&I linkers. I withdrew mine in 2009 and put them into things which have returned me far far more - mostly due to the real rate of inflation which I believe to be much much higher than whatever the government are willing to publish.

That being said, it is better than sticking it in a Cash ISA or savings account.

Do you often answer your own queries.

[Lagarde's Drift]

I think you'll find it's a nominal risk thing.

I'll wager your nominal capital is at risk in all these instruments you talk about. People have differing tolerances to risk. An oft quoted saying that springs to mind is : "Anyone can make a million is risky assets. All you need is a bull market and zero experience."

and I'll wager that you, and others do not understand the risks of fiat, government gilts and other so called safe instruments. Everything has risks, I mitigate mine actively, what are you doing about yours?

Yes we all have different tolerances, but my perception of risk itself is likely different to yours. Similar to the way HPCers perceive houses as risky now whilst sheeple see them as safe.

[Lagarde's Drift]

Do you often answer your own queries.

Lol, I don't understand why people drink turbo cider, but I suppose its better than drinking piss.

[Sledgehead]

and I'll wager that you, and others do not understand the risks of fiat, government gilts and other so called safe instruments.

Really? Maybe you should check out the Weimar graph I posted in "charts of interest".

Everything has risks, I mitigate mine actively, what are you doing about yours?

Well it's none of your business, but I have a spread of investemnts from multi-currency equites to PMs, from cash to corpotate bonds, from property to linkers. You claim you "mitigate yours actively" (risks), but I can't guarantee the nature of the next crash. If it's an 87 variety it will be sudden, immense and of debateable cause. That particular crash crushed all nominal risk assets: bonds were pulverised by 15% interest rates, before snapping back. Equities crashed overnight by a quarter. Gold barely moved before peaking; it took 20 years to make it back to its nominal 87 high. Silver, having slumped for 7 years, doubled and promptly collapsed, again only achieving the nominal 87 peak 20 years later. Crude oil collapsed and went sideways for 13 years. The Swiss Franc peaked in december having doubled over 3 years. It traded sideways for 20 years. 10 year treasury yields rose that year from 7 to 10%. Property slumped for a decade.

The 2000 crash was entirely different. And so was the 2008 one. I've traded markets long and short, leveraged and covered, long term and second by second. Fundamentally and technically. Momentum and contrary. Value and growth. What remains is that mitigation is a matter of diversification. And that means having at least some exposure to cash and fixed interest.

Yes we all have different tolerances, but my perception of risk itself is likely different to yours. Similar to the way HPCers perceive houses as risky now whilst sheeple see them as safe.

Which is what I said. It's just that you flatly discount a deflationary scenario. For me, it's in the bell curve.

[Lagarde's Drift]

Which is what I said. It's just that you flatly discount a deflationary scenario. For me, it's in the bell curve.

Have no idea what I have said to make you think that. It is most definitely in the possibilities - I just do not see the point of sitting on my hands screaming "it's deflation, stupid" like some others on this forum, whilst everything around me inflates.

Getting hit by an asteroid is also in the bell curve - do you think this is a risk worth considering and mitigating? Or would getting hit by a bus be more important? What do you think is the bus that is about to hit us economy-wise?

Edit: p.s. my original point was - I do not understand the fixation on the bloody linked bonds - I have seen people pile their entire savings into them, just like people have piled entirely into various things in the past.

Edited March 24, 2011 by Cash with Nowhere to Go

[ccc]

Lol, I don't understand why people drink turbo cider, but I suppose its better than drinking piss.

Getting 4-6% net on them at present. Not great, however not bad. That is about it in a nutshell. Worse than those who have made 30% plus on PM's ? Yes. Better than others who have lost 30% on various equities ? Yes.

That is why people get them.

[guitarman001]

I don't understand this whole attachment to NS&I linkers. I withdrew mine in 2009 and put them into things which have returned me far far more - mostly due to the real rate of inflation which I believe to be much much higher than whatever the government are willing to publish.

That being said, it is better than sticking it in a Cash ISA or savings account.

I'm getting 4-6% also. very glad I got them as to me they're locked away, and I've frittered a lot of my other money away on 'investments'.