Fantastic Savings Bonds For Brits

[ExpatJ]

UK government just re launched a 5 yr savings bond- they gurantee to beat inflation- annual return is inflation plus around .5% = 5.8% return in first year alone!!!!! And its 100% safe as its underwritten by the government.

The five-year bonds allow savers to invest up to £15,000 and pay RPI plus 0.5 percentage points – making a current return of 5.8% based on the current inflation figure. The bonds are available from the NS&I website and via its phone line: 0500 500 000.

Im signing up asap- great scheme.

[champken]

It sounds like a fair rate of return for the moment but the objective of the government is to considerably reduce the rate of inflation from its current level, so lets assume they succeed in doing that to say 2.5-3%, then all of a sudden the rate of return is not so appealing...are you locked in for 5 years?

[chiang mai]

I don't share your confidence, these bonds weren't withdrawn and then reinstated a year later without reason! Do you really think those bonds will represent an attractive proposition in say two years time, I don't.

[ExpatJ]

you can withdraw your cash anytime...the fact that banks are very angry about these bonds is also telling- they are worried that people will withdraw money from them to invest in the bonds

[pontious]

The website also says ( at the bottom of the page) - only for residents of the UK, Channel Islands and the IOM.

[SantiSuk]

you can withdraw your cash anytime...the fact that banks are very angry about these bonds is also telling- they are worried that people will withdraw money from them to invest in the bonds

Yes you can withdraw anytime, but you will only receive no interest/indexing if you withdraw in the first year and there are reduced rates of interest/indexing payable if you withdraw in years 2 to 5.

Only go in if you are comfortable you can commit money for 5 years - but there is a useful escape hatch if interest rates offered by the rest of the market were to suddenly become significantly supra-inflationary like they were in the 90s (pigs might fly!).

Certainly worth having in a balanced portfolio of long term and short term savings plus other investments. They beat just about every other 5 year savings investment available in the UK banking market at the moment (ignoring higher risk stuff like the loan purchase schemes).

[PattayaParent]

The website also says ( at the bottom of the page) - only for residents of the UK, Channel Islands and the IOM.

I had seen an article on these bonds and was going to investigate further but now you've saved me the trouble.

Thanks

[12DrinkMore]

Misinformation Alert!

..... Always do you own research

These bonds are available to anybody on the globe over the age of 7, and those under that age can have bonds purchased for them. Up to 15,000 quid can be invested in both the index linked and the fixed rate bonds. I would only be interested in the index linked bonds.

If you are living abroad you need to go through the "money laundering" hoops.

http://www.nsandi.co...-proof-identity

Live outside the UK?We can't make electronic checks outside the UK so you need to send us a certified copy* of certain documents for all persons named on the application who live outside the UK. These documents are:

- their current passport or official identity card;

- and a letter or notification from their local tax authority, which must be dated within the last three months and include their name and current address

The last requirement will be a sticking point for me, I have emailed them and asked about possible alternatives.

Edited May 14, 2011 by 12DrinkMore

[pontious]

Misinformation Alert!

..... Always do you own research

These bonds are available to anybody on the globe over the age of 7, and those under that age can have bonds purchased for them. Up to 15,000 quid can be invested in both the index linked and the fixed rate bonds. I would only be interested in the index linked bonds.

If you are living abroad you need to go through the "money laundering" hoops.

http://www.nsandi.co...-proof-identity

Live outside the UK?We can't make electronic checks outside the UK so you need to send us a certified copy* of certain documents for all persons named on the application who live outside the UK. These documents are:

- their current passport or official identity card;

- and a letter or notification from their local tax authority, which must be dated within the last three months and include their name and current address

The last requirement will be a sticking point for me, I have emailed them and asked about possible alternatives.

I assume you are referring to my post. I would not want to confuse potential investors like PattayaParent so I will clarify with the following.

The NSANDI website at the bottom of the page says ' This website is intended for residents of the UK Channel Islands and the Isle of Man'

If you click on the ''site conditions and legal conditions of use'' the first paragraph says:

''By using this website which is intended for residents of the UK Channel Islands and the Isle of Man only you have confirmed that you are a resident.''

The next paragraph goes on to say what to do if you do not live in any of the above - let us now how you get on. Looks too difficult for me.

[creck]

The checks are more stringent than I have seen before. I have had some Savings Certificates (earlier issues obviously) repaid to my address in Thailand without problems.

The current rate of 2.25% or 0.5% + inflation is actually lower than has been previously offered. They are clearly useful if you want to keep a hold on UK inflation. The rate of inflation in Thailand alongside the UK rate is what you need to think about and that for five years – quite difficult. The current rate in the UK is exceptional. To think of the return in one year, when you can’t touch it, is misleading.

[jocko]

Todays Sunday Times says you can do better in a 5year Cash isa check out the money section

[PattayaParent]

Todays Sunday Times says you can do better in a 5year Cash isa check out the money section

Non residents can't have an ISA though.

[midas]

After all the scandals that have been revealed during the financial crisis

in particular in Europe- would you seriously trust the government with your money ?

I would not trust them to give the right time of day

Dont forget this is not the 1950's and 1960's when there were standards

in government and just maybe you could rely on getting your money back

No matter how attractive the return might be i would be more concerned

about "return of capital " than " return on capital "

[12DrinkMore]

Well, I've received a remarkably quick response;

I am sorry but you can only invest in our NS&I Saving Certificate's either using a debit card (if you already have a holding) or by cheque, and they must be drawn against a UK clearing Bank.

If you already have a holding of Saving Certificates we would not require any further proof of your identity or address. If this is your first purchase we would require a Certified copy of your Passport/ID Card, and a Bank statement no more than three months old which must show your full name and address.

I am fed up with the UK and it's constant BS over money laundering. Must be thousands of jobsworthies whose income depends on ticking checkboxes and inventing new ones. Maybe the needs of the UK population would be far better served if they applied the same level of checks to the operation of the banks, government officials and politicians.

As I am more interested in other parts of the globe which show far more promise of a return on my investments than GBP based assets, I will not be going through the hoops backward just to invest GBP 15k in the UK government scheme.

However, in reply to Midas, I am absolutely convinced that the UK government can return GBPs as they can print the things willy nilly. But how much they will be worth in five years is anybody's speculation.

Edited May 16, 2011 by 12DrinkMore

[morphic]

for the sake of 15k would this be worth the paperwork even if satisfying the residence requirements?

even if you get 5% or so, which is 1.5% higher than you can get elsewhere but for unlimited amounts invested, thats a total of 225 quid...if thats a big deal then you really are in trouble...

[12DrinkMore]

for the sake of 15k would this be worth the paperwork even if satisfying the residence requirements?

even if you get 5% or so, which is 1.5% higher than you can get elsewhere but for unlimited amounts invested, thats a total of 225 quid...if thats a big deal then you really are in trouble...

Every little bit helps.

Look after the pennies and the GBP's look after themselves, as me Grandmum used to say. Well, maybe they did in Grandma's time, but after the Labour party and now Merv at the helm I ain't so sure nowadays...

But to be sure, 225 quid is enough beer for a month or so.

But as a hedge against inflation, maybe worth bunging 15k in if you can deal with the laundry stuff easily.

Oh, and yes, I do tend to go off about the UK banks on occasion. And justifiably so, IMO, as they offer a piss-poor service, took the UK economy down the tubes, made themselves fortunes in the process, don't pay as much tax as they should and then threaten to leave the UK if they are not allowed to carry on as before.

Edited May 18, 2011 by 12DrinkMore

[morphic]

for the sake of 15k would this be worth the paperwork even if satisfying the residence requirements?

even if you get 5% or so, which is 1.5% higher than you can get elsewhere but for unlimited amounts invested, thats a total of 225 quid...if thats a big deal then you really are in trouble...

Every little bit helps.

Look after the pennies and the GBP's look after themselves, as me Grandmum used to say. Well, maybe they did in Grandma's time, but after the Labour party and now Merv at the helm I ain't so sure nowadays...

But to be sure, 225 quid is enough beer for a month or so.

But as a hedge against inflation, maybe worth bunging 15k in if you can deal with the laundry stuff easily.

Oh, and yes, I do tend to go off about the UK banks on occasion. And justifiably so, IMO, as they offer a piss-poor service, took the UK economy down the tubes, made themselves fortunes in the process, don't pay as much tax as they should and then threaten to leave the UK if they are not allowed to carry on as before.

If 225 quid is a big deal to you then go ahead, enjoy.

But for me its just too small to act as any kind of hedge against inflation or provide any kind of relevant return.

Concerning banks, it was over borrowing and over reliance on credit that brought the UK down, the banks just did the lending. So, as much as blaming the banks, the average man in the street should blame himself.

As for paying too little tax, they pay huge amounts of tax. And the amount of tax they pay is based on the UK tax code, not some number they make up. Any more tax and they will indeed move and when that happens I can assure you they will be missed as the are the UK's main payers of tax. Lose them and see how much money the UK has left to support the vast number of the UK's scroungers.