National Savings reduce investments
National Savings & Investments (NS&I) introduced two significant changes to its products on 1 May 2019.
National Savings & Investments (NS&I) introduced two significant changes to its products on 1 May 2019, neither of which benefits investors:
If you reinvest a maturing holding of Index-linked Savings Certificates, the return on your replacement certificate will be based on the Consumer Price Index (CPI) rather than the Retail Prices Index (RPI). The change, which was announced last October, is forecast to save the taxpayer – and thus cost investors – £610 million over the next five years. Over the past five years to March 2019, the RPI rose by 11.9% whereas the CPI only increased by 7.3%.
New issues (and maturity reinvestments) of Guaranteed Income Bonds and Guaranteed Growth Bonds will no longer offer an early encashment option after the first 30 days. The changes will prevent holders paying a small penalty to switch to other more attractive issues mid-term, if interest rates rise.
The information in this article does not constitute advice and should be used for informational purposes only. This content has been provided to Helm Godfrey by Taxbriefs.