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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 January 2019 rate of 2.5%) CPI (using using January 2019 rate of 1.8%) 2-year Index-linked Savings Certificate £1,050.83 Index-linking + 0.01% £1,036.53 Index-linking + 0.01% 3 year Index-linked Savings Certificate £1,077.21 Index-linking + 0.01% £1,055.29 Index-linking + 0.01% 5-year Index-linked Savings Certificate £1,131.97 Index-linking + 0.01% £1,093.85 Index-linking + 0.01%
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.
In 2013, as a result of flaws in the way it is measured, RPI lost its status as a National Statistic. The 2015 Johnson Review of Consumer Price Statistics recommended that government and regulators should work towards ending the use of RPI as soon as practicable. Starting in 2010, successive governments have reduced their use of RPI. The indexation of direct taxes, benefits, public sector pensions, the State Pension and business rates have all moved from RPI to CPI.
The change also helps us to balance the interests of our savers and the cost to taxpayers.
The launch of the new online service for financial advice firms in May 2019 is the first step in our plans to form closer ties with advice firms.
Once the service has established itself, we will then turn our attention to exploring other service enhancements such as transaction access and links with platforms, back office systems and/or cash management systems. The plan is to fully research these areas in 2020, including assessing the appetite for these services across the industry.
Clearly being a public sector entity our budgets are lower compared to the private sector providers that advice firms are used to dealing with as we are financed by the taxpayer. Therefore we have to prioritise the most important service enhancements first, based on the needs of advice firms according to research.
No, your client will have to transfer in the balance from the Child Trust Fund or other cash Junior ISA.
If I want to find out information on NS&I holdings held in a SIPP or SSAS how should I complete the ‘Terms of Business Agreement’ and ‘Letter of Authority Templates’?
You will have to complete a Terms of Business Agreement for your firm. The Letter of Authority must list all trustees’ names in paragraph 1 and the signatures of all trustees responsible for the account will be required on the completed Letter of Authority.
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