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Media centre /
Press releaseCASH VALUES FOR NS&I’s INFLATION-BEATING SAVINGS IN JUNE 200919 May 2009RPI inflation decreases to –1.2% The tables attached provide the June 2009 cash values for Inflation-Beatings Savings (Index-linked Savings Certificates) held for one year or more. NS&I’s Inflation-Beating Savings are lump sum investments, designed to be held for either three or five years. The Savings Certificates pay a fixed rate of interest on top of the rate of inflation (as measured by the Retail Prices Index) to ensure that savings stay ahead of rising prices. On each anniversary interest and index-linking are added to the Certificate. NS&I released two new Issues of the Certificates in April 2009, 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-free home, with a guaranteed inflation-beating return. In the event of negative inflation2 from one anniversary to the next, then no index-linking is added but provided that the Certificate is held for the full term savers would still be entitled to the full guaranteed compound rate of interest. The new Issues of Index-linked Savings Certificates (19th for the 3-year term and 46th for the 5-year) pay a guaranteed compound rate of 1% AER in addition to index-linking. NS&I’s spreadsheet calculator is a quick and easy way to check approximately how much Index-linked Savings Certificates are worth and includes supplements, bonuses and extra interest earned at the relevant rates for each Issue. The calculator can also be accessed at www.nsandi.com/products/ilsc/calculator.jsp. Retail Prices Index For working out these values in June5 the Retail Prices Index figure is 211.5, meaning that the Index level is 1.2% lower than it was a year ago. Peter Cornish, Director of Customer Offer at NS&I said “Inflation-Beating Savings offer savers the security of knowing that their investment will always be protected from inflation. Even with the current deflation, provided that the Certificate is held for the whole term, the investment will still receive the full guaranteed compound interest. Also, when we calculate the returns on the investment we look at each anniversary of the investment separately. For example, if there is deflation in the first year then savers will still receive interest. Then if inflation goes up again in following years, savers will benefit from both interest and index-linking.” Inflation-Beating Savings rates of return Index-linked Savings Certificates offer a tax-free return that beats inflation when held for at least a year.
ENDS Notes to Editors 1. All returns are free of UK Income Tax and Capital Gains Tax. 2. If there is deflation throughout the whole term of the Certificate, then provided that the Certificate is held for the whole term you would be entitled to the full guaranteed compound rate of interest. 3. 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. 4. RPI (Retail Prices Index) is the measure of inflation NS&I uses to calculate changes in the value of its Index-linked Savings Certificates. The RPI is compiled and published monthly by the Office of National Statistics. The RPI can go up or down. 5. The RPI in April 2009 (announced 19 May 2009) will apply to investments, valuations and repayments made during June 2009. 6. Valuations for the 2-year, 3-year and 5-year Certificates are shown in separate tabs of the attached document. They are for indicative purposes only and show the value if you were to cash in during June. 7. Customers requiring more information or an exact valuation of a Certificate can call NS&I on 0845 964 5000. Maximum call charges from a BT landline are 4p per minute. Charges from other service providers will vary. For your security and to maintain the highest levels of service, calls may be recorded. 8. NS&I 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 we are backed by HM Treasury. 9. Subscribe to the NS&I RSS newsfeed. Simply copy and paste this link www.nsandi.com/mediacentre.xml into your RSS reader to receive regular news alerts from NS&I.
Media team The numbers below are for media use only. Customers wishing to contact NS&I can find details here.
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