©Ithica Publishing Services
Our associate company Rabix Wealth has been recommending that all investors consider the merits of index linked investments for some time now, subject to receiving individual investment advice.
If you are able to get a good deposit rate from your building society of say 3.75% but pay tax at 40% then your after tax return is 2.25%. As the present RPI is around 5% – you are losing 2.75% per annum.
So it is worthwhile considering an alternative form of saving – such as index linked savings but what type you purchase, depends on your tax position.
We believe high rate tax payers should consider National Savings and investments (NS&I) inflation linked certificates.
The minus points of these are – as follows:
they only pay 0.5% interest above inflation
five year term
limit of £15,000 person.
Even so, they merit consideration as :-
they are free of tax
they can be encashed after one year without penalty.
Given the volatility of world markets this has an added bonus “peace of mind”.