Press Release

NS&I LAUNCHES NEW INDEX-LINKED SAVINGS CERTIFICATE CALCULATOR TO HELP CUSTOMERS MONITOR THE VALUE OF THEIR SAVINGS

26 June 2006

The Range of Inflation-beating Savings currently offer equivalent returns of up to 6.9%

From today National Savings and Investment's customers can track the value of their Index-linked Savings Certificates online using a new value calculator.

NS&I's range of Inflation-beating Savings offer tax-free** returns guaranteed to be higher than the rate of inflation at all times.  Available for terms of 3 and 5 years, they are the only savings product range on the high street to offer such a guarantee, and are now also available online and via Tesco's website. 

The calculator replaces the monthly cash value tables, as a quicker, more convenient way for customers to check the approximate value of their investment. This service makes it easier for customers to keep on top of their savings.

The online calculation tables refer to all Index-linked Savings Certificates bought by the investor since their first launch in 1975.  Currently there is almost £10 billion invested in Index-linked Savings Certificates, held by approximately 680,000 customers.  The value shown in the table includes all supplements, bonuses and extra interest.

The calculator and tables can be accessed at http://www.nsandi.com/products/ilsc/calculator.jsp.

How do Inflation-beating Savings work?

The Inflation-beating Savings range consists of three and five-year Index-linked Savings Certificates. The money invested earns a return directly linked to the headline rate of inflation, otherwise known as the Retail Prices Index (RPI)* - currently at 3% - plus guaranteed rates of interest on top.  This means the returns outstrip inflation and, as nothing is taken away in tax**, the spending power of your money is increased by the end of the term.

Anyone aged seven or over can invest from £100 up to £15,000 per Issue (a new issue becomes available each time NS&I changes the interest rate on Saving Certificates), and they may be bought for children under seven.

Making the most of your money

Because Index-linked Saving Certificates offer a tax-free** return that beats inflation, it makes them particularly attractive for basic as well as higher rate taxpayers.

Investment terms and interest rate

Investment terms and interest rate	Equivalent gross rate for basic rate taxpayers	Equivalent gross rate for higher rate taxpayers
5-year (Issue 41) 1.10% + index-linking (RPI currently 3.0%)	5.13%	6.83%
3-year (Issue 13) 1.05% + index-linking (RPI currently 3.0%)	5.06%	6.75%

(These figures assume the RPI rises by 3.0% each year for the next five years and current rates of tax)

Growth Guaranteed

Peter Cornish, NS&I's marketing director, said: "With RPI now at 3%, Inflation-beating Savings are even more relevant to protect against inflation which could diminish the value of your savings. By tracking RPI and paying fixed rates of interest on top, Inflation-beating Savings guarantee your money grows in real terms.

"Making life easier for customers is important to NS&I, that is why we have designed this calculator as a quick way for customers to track growth and monitor their savings."