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Media centre /
Press releaseNEW ISSUES OF INFLATION-BEATING SAVINGS FROM NS&I29 April 2009
NS&I has today released two new issues of Inflation-Beating Savings, also known as Index-linked Savings Certificates, giving savers the chance to invest up to £15,000 tax-free1 per issue. The Certificates are the only form of savings available in the retail market that offer a 100% safe, tax-free1 home, with a guaranteed inflation-beating return. The value of Index-linked Savings Certificates moves in line with inflation as measured by the Retail Prices Index (RPI), and interest is added on each anniversary. The Certificates are designed to be held for the whole investment term to receive the full guaranteed compound interest, as the guaranteed rates of extra interest increase each year during the term. This means the returns outstrip any rise in RPI inflation and, as nothing is taken away in tax, the spending power of the investment is increased by the end of the term. This is the first time that a continuous period of deflation has been experienced since NS&I’s Index-linked Savings Certificates were launched in 1975. Interest and any positive index-linking are applied annually on each anniversary date. However, if index-linking is negative from one anniversary to the next, it is ignored and the extra interest is still added. With the introduction of these new issues, the previous issues - which were available from June 2008 - have been removed from sale. People who already have an investment in a former issue of Inflation-Beating Savings are also eligible to invest in the new issues. NS&I Inflation-Beating Savings key features
Investment terms and interest rate
ENDS Notes to Editors 1. Tax-free means that interest and index-linking are exempt from UK Income Tax and Capital Gains Tax. 2. AER stands for Annual Equivalent Rate and enables the comparison of interest rates from different financial institutions and across different products on a like-for-like basis. It shows what the notional annual rate would be if interest was compounded each time it was credited or paid out. Where interest is credited once a year the rate quoted and the AER will be the same. 3. The rate of inflation is calculated using the Retail Prices Index (RPI). The RPI measures the average change from month to month in the prices of goods and services purchased by most households in the United Kingdom (Office of National Statistics). NS&I continues to use the RPI as the measure of inflation, and not the Consumer Prices Index (CPI), which the Government now uses for its inflation target. Both the RPI and CPI can go up or down, and the differences between them can change. 4. National Savings and Investments is one of the largest savings organisations in the UK, offering a range of savings and investments to almost 27 million customers. All products offer 100% capital security, because NS&I is backed by HM Treasury. 5. Further information and digital images are available from the NS&I media team. An ISDN line is available for interviews.
Media team The numbers below are for media use only. Customers wishing to contact NS&I can find details here.
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