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Home > Investments > Tax Efficient Investments

By Marc Shoffman | Published Apr 25, 2012

Index-linked issues unlikely to return for 2012

A spokesman said this was due to the net financing target of zero announced in the Budget, which means it cannot increase or decrease its total stock, during the financial period of 1 April to March 2013.

He said: “On the basis of our net financing target, it is highly unlikely we will be in a position to offer any new issues of the index-linked savings certificates in the coming financial year.”

The last issue of the products, which was on sale from May 2011 to September 2011, had 500,000 transactions. It closed early due to high demand and to meet its net financing target of that financial year.

Hugo Shaw, business manager for London-based Bestinvest, said: “With the likes of sky-high fuel prices and increasing costs from staple foods, such as bread and cereals, all set against the regularly reported backdrop of official inflation being well above the government’s target for several years, it is no surprise that many savers and investors are keen to protect their money from the ravages of inflation.

“There are a number of options, but nothing quite like what NS&I used to offer. If you are prepared to tie your money up within a fixed-rate bond then you can find some paying more than 4.5 per cent - higher than the current level of inflation of 3.5 per cent.

“However, if inflation were to increase then the fixed rate won’t move to keep up, meaning you could end up losing out. Also, interest from the NS&I certificates is tax-free for all, whereas most savers will incur tax on fixed-rate bonds or other cash products making the inflation figure even harder to beat.”

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