National Savings & Investments (NS&I) introduced two significant changes to its products on 1 May 2019, neither of which benefits investors:

  • If you reinvest a maturing holding of Index-linked Savings Certificates, the return on your replacement certificate will be based on the Consumer Price Index (CPI) rather than the Retail Prices Index (RPI). The new rate will be applied to all certificates that mature on and after 1 May 2019. The change, which was announced last October, is forecast to save the taxpayer – and thus cost investors – £610 million over the next five years. Over the past five years to March 2019, the RPI rose by 11.9% whereas the CPI only increased by 7.3%.
  • New issues (and maturity reinvestments) of Guaranteed Income Bonds and Guaranteed Growth Bonds will no longer offer an early encashment option after the first 30 days. The changes will prevent holders paying a small penalty to switch to other more attractive issues mid-term, if interest rates rise.
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