National Savings and Investment Saving-Certificate

National Savings and Investment (NS&I) offer a range of 100% secure savings products, some of which are completely tax-free. NS&I started off as part of the UK Post Office and is still completely backed by the UK government, unlike most other forms of savings account.

There are various ways of legally hiding your money from the taxman, such as ISAs (Individual Savings Accounts), Personal Pensions, VCTs and EIS schemes, Premium Bonds, but perhaps the simplest and safest is the Savings Certificate. These have been around for many years and are a government-backed saving account similar to a fixed term savings bond and available in index-linked or fixed interest varieties. What most people don't know is how much money can be hidden in these accounts: you can save £15,000 in each issue (maybe two fixed interest and two index linked each year) and these can be rolled over into new issues when they mature after three or five years.

National Savings and Investment Savings Certificates were withdrawn from sale in 2010, but it was announced by George Osborne, The Chancellor of the Exchequer, in the March 2011 UK Budget, that they will be relaunched in the 2011/2012 tax year, including both the fixed interest and the index-linked certificates. The index linked certificates were relaunched in May 2011 and are still linked to the more generous (and more realistic) RPI inflation and not the lower CPI figure used for most other government schemes such as pensions, but now just 0.5% above RPI and only available as a five year certificate. They may be withdrawn again if demand is too great, because as a state backed scheme they are not allowed to compete unfairly with other banks.

Update: NS and I Savings Certificates were again withdrawn from sale on 6th September 2011. There are still similar products available from the Post Office and other banks or building societies (although without the advantage of being tax-free)

Disclaimer: Information in this and other linked articles is unregulated and for general information only and is not intended to be relied upon in making specific investment decisions. Appropriate independent advice should be obtained before making any such decision.