Reply to: Index linked saving certificates are back

[AtW]

There is no economic reason to borrow under such high interest rate when you can print money or borrow them under much lower. They might be doing it to say later - look, we've tried to "help" you: £15k is nothing anyway, it won't help pensioners much.

[TimberWolf]

This seems to suggest rates would have to go up and fast - either that or they are desperate for cash.

Maybe they don't want people to hold gold, etc, so that they can part people from their savings painlessly, without them noticing as the pound slides. Their economic tools loose effectiveness if people don't hold the currency.

[MarillionFan]

There's a really good article in Times Yesterdays money section on how to only pay 20% tax on 78k if you're retired. See if you can find
A copy.

[AtW]

This seems to suggest rates would have to go up and fast - either that or they are desperate for cash.

[Olly]

errrr..the money isn't locked up for 5 years! I'm glad it said that in the Mail though as it's going to take a few days to jig things around so I've got 15K in my current account to pay for it before they're sold out

[Lumiere]

5% RPI + 0.5% on £15k = £825 tax free for the year.

A days money. I agree.

more like £200-£300 if the money is already a part of an offset mortgage

and if interest rates go up the difference will become marginal, and your money is not locked up for 5 years as a bonus

pass

[DimPrawn]

Thousands scramble to register for the new 9% savings rate | Mail Online

[DimPrawn]

Thanks for the replies - it's for my my father-in-law. It's a significant amount of cash - he doesn't have an ISA for this year yet. I was thinking of ISA, NS&I 15K and that's just for starters. I'm sure the IFA we're seeing Saturday will suggest things as well. I've been caught before buying high commission financial products that have lost money in real terms. Surprisingly as it's not my own cash I'm inclined to be much more conservative.

Is there a way of investing outside of the £ so that I'm hedged when it collapses (apart from gold)?

You could buy foreign defensive stocks priced in USD, EUR or whatever you fancy that pay a regular and reasonable dividend. You could buy foreign bonds and gilts too. I would still buy gold however after the latest selloff looks like it's finished as USA and UK are still likely to solve their debt problems by printing more money. Gold is easy to trade, very liquid market with low transaction costs and you can sell into other currencies too.

Oh, and stick some money into Zopa, as the returns are very good and the risk is low.

[Lockhouse]

Thanks for the replies - it's for my my father-in-law. It's a significant amount of cash - he doesn't have an ISA for this year yet. I was thinking of ISA, NS&I 15K and that's just for starters. I'm sure the IFA we're seeing Saturday will suggest things as well. I've been caught before buying high commission financial products that have lost money in real terms. Surprisingly as it's not my own cash I'm inclined to be much more conservative.

Is there a way of investing outside of the £ so that I'm hedged when it collapses (apart from gold)?

[MarillionFan]

Tax man takes his chunk though.

Depends on how much incomr the OPs 'grandad' has. If you'd read he said he had a bond coming up, so
even with an ISA he could only move 5k

[DimPrawn]

The best on the market is a bond at 5.05% with Birmingham - (scroll to bottom)

Find & Compare Fixed Rate Bonds | moneysupermarket.com

He could take a monthly interest and top his income up or leave it to accumulate. The monthly interest could be paid into his current account as opposed to back into the bond. Now interest rates may go up. If they go up a lot then take the penalty in a few years and move to a higher account.

Tax man takes his chunk though.

[MarillionFan]

So in all seriousness, I've got a reasonable amount of cash to invest on someone else's behalf, even though there are lots of mini-bubbles about, what's going to be a good bet for the next 5 years?

The best on the market is a bond at 5.05% with Birmingham - (scroll to bottom)

Find & Compare Fixed Rate Bonds | moneysupermarket.com

He could take a monthly interest and top his income up or leave it to accumulate. The monthly interest could be paid into his current account as opposed to back into the bond. Now interest rates may go up. If they go up a lot then take the penalty in a few years and move to a higher account.

[DimPrawn]

So in all seriousness, I've got a reasonable amount of cash to invest on someone else's behalf, even though there are lots of mini-bubbles about, what's going to be a good bet for the next 5 years?

Index linked certs and cash isas and then in a couple of years spend the lot on BTL property at auction when the repos kick in so you'll have an income and capital appreciation when the next property bubble blows up.

[Lockhouse]

So in all seriousness, I've got a reasonable amount of cash to invest on someone else's behalf, even though there are lots of mini-bubbles about, what's going to be a good bet for the next 5 years?

[DimPrawn]

Listen to me. You are not a millionaire. You are a pathetic, broken-minded, little bum. In your mind you think you're a millionaire but you're not.

HTH

Thanks for clearing that up for me.

The nurse says I'm to get back to bed now, so catch you all laters.