Inflation figures

[AtW]

You still did not get it?

The rates will stay low and inflation will stay high - so will taxes to control wage inflation.

So basically in this scenario everyone will be shafted, rather than only those who got were greedy/stupid and got overextended, those who did not take part in those debt games are the biggest losers in this.

[TimberWolf]

You still did not get it?

The rates will stay low and inflation will stay high - so will taxes to control wage inflation.

So basically in this scenario everyone will be shafted, rather than only those who got were greedy/stupid and got overextended, those who did not take part in those debt games are the biggest losers in this.

I don't think bankers will be shafted. The bank always wins.

[sasguru]

You still did not get it?

The rates will stay low

No they won't. Whether the banks reflect that in savers interest is another matter.

[TimberWolf]

No they won't. Whether the banks reflect that in savers interest is another matter.

Osbourne: Our fiscal policy will help keep interest rates lower for longer

He's been reiterating that today, with added reference to putting pressure on central banks, whatever that means. Basically the same economic policy as New Labour, to keep house prices up and shaft savers. I wonder where him and his rich buddies have stashed their loot?

[DimPrawn]

Well at least it means that my NS&I savings certificates will be going up - at RPI+1% they'll now be earning me 6.3% pa tax free. Not too shabby.

Now I just need to decide whether to take money out of the tracker mortgage (.95% above base) and put it into savings certificates. It depends on whether it looks like base rates are going to go up and inflation come down in the next 12 months. Any guesses on that?

Sadly you didn't read the small print did you?

The RPI figure used is the one prior to the month you bought it in and same figure is used for the whole year. So if you bought some time ago you will have a small RPI applied at the end of the year, not the big figures we are seeing now.

Savings - Telegraph


The separate, variable part of the return, linked to inflation, is known as index-linking. We work out index-linking by using the RPI figures applicable at the start and end of each year of an investment, not the monthly changes in between. If the index-linking is positive, we add it on each anniversary of your investment. If it is not – as we have seen recently – the interest is added but no adjustment is made for a negative RPI.

[Mich the Tester]

We work out index-linking by using the RPI figures applicable at the start and end of each year of an investment, not the monthly changes in between. If the index-linking is positive, we add it on each anniversary of your investment. If it is not – as we have seen recently – the interest is added but no adjustment is made for a negative RPI.

Bloody idiot permies. Why bother with all that hard work when you can roll a couple of dice, write down a number and then go down the pub?

[lje]

Sadly you didn't read the small print did you?

The RPI figure used is the one prior to the month you bought it in and same figure is used for the whole year. So if you bought some time ago you will have a small RPI applied at the end of the year, not the big figures we are seeing now.

Savings - Telegraph


The separate, variable part of the return, linked to inflation, is known as index-linking. We work out index-linking by using the RPI figures applicable at the start and end of each year of an investment, not the monthly changes in between. If the index-linking is positive, we add it on each anniversary of your investment. If it is not – as we have seen recently – the interest is added but no adjustment is made for a negative RPI.

Actually I did read the small print.

It seems that you don't quite understand how it works. From the same article which you linked to...

What happens on each anniversary?
On each anniversary of the purchase date, until the end of the certificate term (known as "maturity"), the RPI index figure is checked. If it is lower than the index figure used at the starting point of the certificate or the previous anniversary, the negative index-linking is ignored. If it is higher, then positive index-linking will be added. At the same time we also add the fixed rate of interest. All of the certificate anniversary values are calculated in this way until maturity to provide the overall certificate value.

So - if you took out a savings certificate in March (which I did) then they use the RPI figure which was published in February. Let's say that had an index value of 100 (just to make things easy). Inflation has been increasing so (for a simple example) in March perhaps the index was 101 - in April it was 102 - in May it was 103. If there is no inflation or deflation for the rest of the year then the rate paid will be the increase in the RPI (3% in my example) plus 1%.

So you'll see that to get the best return you want the inflation rate to be as high as possible during the year so that a lower index level exists at the start than at the end. I admit that the 6.3% is not guaranteed at the moment - but that would be the value if the saving certificate had been taken out 12 months ago. The more that inflation goes up the higher the rate of interest I will earn for this year.

[AtW]

It seems that you don't quite understand how it works.

He is dim.

[DimPrawn]

Actually I did read the small print.

It seems that you don't quite understand how it works. From the same article which you linked to...



So - if you took out a savings certificate in March (which I did) then they use the RPI figure which was published in February. Let's say that had an index value of 100 (just to make things easy). Inflation has been increasing so (for a simple example) in March perhaps the index was 101 - in April it was 102 - in May it was 103. If there is no inflation or deflation for the rest of the year then the rate paid will be the increase in the RPI (3% in my example) plus 1%.

So you'll see that to get the best return you want the inflation rate to be as high as possible during the year so that a lower index level exists at the start than at the end. I admit that the 6.3% is not guaranteed at the moment - but that would be the value if the saving certificate had been taken out 12 months ago. The more that inflation goes up the higher the rate of interest I will earn for this year.

Shame you don't understand how it works.

You are in for a big disappointment at the end of the anniversary.

The RPI could go up to 1000% and you won't see more than the rate fixed at the start. Monthly figures are not used in between.

Simples.

I know how they work, I've held them before for many years.

[rootsnall]

Shame you don't understand how it works.

You are in for a big disappointment at the end of the anniversary.

The RPI could go up to 1000% and you won't see more than the rate fixed at the start. Monthly figures are not used in between.

Simples.

I know how they work, I've held them before for many years.

I'm with lje. ( will he admit he is wrong !?! )