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When will NS&I let my clients know when the change from RPI to CPI on Index-linked Savings Certificates is taking place?
We will write to your clients about a month before each Certificate matures and let them know what their options are. Your clients can then decide whether they want to renew or cash in their investment without penalty.
Following the change on Index-linked Savings Certificates from RPI to CPI, are Index-linked Savings Certificates still a good investment?
Index-linked Savings Certificates are still a popular investment with a unique combination of index-linking plus a small amount of additional interest – all tax-free.
Will the change from RPI to CPI on Index-linked Savings Certificates affect my clients’ existing Certificates?
No, it won’t affect any existing Certificates your clients have until the end of the investment term. However, if your clients decide to renew any Certificates that mature on or after 1 May 2019, the index-linking will then be calculated using CPI not RPI.
What is the difference between RPI and CPI (the indexes used for Index-linked Savings Certificates)?
Both the Consumer Prices Index (CPI) and the Retail Prices Index (RPI) measure inflation. Each aims to measure the changes in the cost of buying a 'basket' of products and services, but they cover different items and there are differences in the formulas used.
To find out more about CPI and RPI, visit the Office for National Statistics website at ons.gov.uk and search CPI All Items Index or RPI All Items Index.
Your clients will continue to receive 0.01% interest in addition to the index-linking. Here is an illustration of what your clients could expect to receive from a £1,000 investment based on the current RPI index, and what the return could be based on CPI.
Term RPI (using September 2018 rate of 3.3%) CPI (using September 2018 rate of 2.4%) 2-year Index-linked Savings Certificate £1,067.29 £1,048.78 3 year Index-linked Savings Certificate £1,102.62 £1,074.05 5-year Index-linked Savings Certificate £1,176.82 £1,126.45
These are illustrations only, so they don’t take into account your clients’ individual circumstances. They assume that your clients don't make any withdrawals during the term.
The rates of inflation can go up or down so the illustrations are not a guarantee of the return your clients will receive. The actual return your clients receive will depend on the levels of the relevant index that apply at the start and end of each investment year.
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