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Index-linked Savings Certificates

Do you have a Certificate
that matures soon?

Here’s what you need to do next

What you need to decide

When you invest in an Index-linked Savings Certificate you agree to keep it until the end of the term. We will write to you around 30 days before that date to let you know your options.

These will normally include:

  • renewing your Certificate for another term of the same length
  • renewing it for a term of a different length (only 3-year and 5-year terms available)
  • cashing it in

To choose the first option, you don’t need to do anything – your Certificate will automatically renew for another term of the same length.

But make sure this is what you intend. If you change your mind after it has renewed and want to cash in before the end of the new term, we’ll charge you a penalty equal to 90 days’ interest on the amount cashed in. And you’ll lose the index-linking on your whole Certificate for that investment year.

Remember that the interest rate for renewing your investment could be higher or lower than the rate for your current term.

The information on this page is only relevant if you have a Certificate maturing soon.

Not heard from us?

Call us if you have any questions or you haven’t heard from us 30 days before the end of your investment term. And don’t forget to tell us if you change your address or contact details.

Call us

Renewing your Certificate

We currently offer lssues which are only available to customers with maturing Certificates. They are not on general sale. You can renew up to the total value of your maturing Certificate, including all the interest and index-linking you earned. Or you can cash in some of your investment and renew the balance. You won’t be able to add any extra money to your Certificate.

Interest rates

These are the rates currently available for renewing a mature Certificate:

Issue Term Date rate applied from Interest rate
Issue 43 2 year only available when renewing from an existing 2 year Certificate 28 March 2016 Index-linking +0.01% tax-free/AER
Issue 26 3 year 28 March 2016 Index-linking +0.01% tax-free/AER
Issue 53 5 year 28 March 2016 Index-linking +0.01% tax-free/AER

Tax-free means the interest is exempt from UK Income Tax and Capital Gains Tax.

AER (Annual Equivalent Rate) illustrates what the annual rate of interest would be if the interest was compounded each time it was paid. Where interest is paid annually, the quoted rate and the AER are the same.

Index-linking means the value of your investment moves in line with inflation as measured by the Retail Prices Index (RPI). To check the RPI, visit the Office for National Statistics website at and search for RPI All Items Index.

Cashing in early

Index-linked Savings Certificates are designed to be held for the whole of your chosen investment term. You can cash in at the end of a term with no penalty or loss of interest.

If you cash in early we will deduct a penalty from your payment, equivalent to 90 days’ interest on the amount cashed in. And you’ll lose the index-linking on your whole Certificate for that investment year.

Bear in mind that if you cash in all of your Certificate within 90 days of renewing, you will get back less than your renewal value.

When you cash in part of a Certificate, at least £100 must remain in the Certificate to keep it open.

What's changing?

We’re changing the way we calculate index-linking on our Index-linked Savings Certificates, in line with the government’s switch to use the Consumer Prices Index (CPI) as the standard measure for UK inflation. We’re making the change to save money for taxpayers.

If you have any Index-linked Savings Certificates, the change will only affect you when each Certificate reaches the end of its investment term on or after 1 May 2019. If after this date you choose to renew your Certificate for a further investment term, we will then calculate the index-linking using the CPI instead of the RPI. You will still benefit from tax-free, inflation-beating savings – we will just be using a different index.

  • Why are you changing the index on Index-linked Savings Certificates from RPI to CPI?

    In 2013, as a result of flaws in the way it is measured, RPI lost its status as a National Statistic. The 2015 Johnson Review of Consumer Price Statistics recommended that government and regulators should work towards ending the use of RPI as soon as practicable. Starting in 2010, successive governments have reduced their use of RPI. The indexation of direct taxes, benefits, public sector pensions, the State Pension and business rates have all moved from RPI to CPI.

    The change also helps us to balance the interests of our savers and the cost to taxpayers.

  • How will this affect me?

    You will continue to receive 0.01% interest in addition to the index-linking. Here is as illustration of what you could expect to receive from a £1,000 investment based on the current RPI index, and what the return could be based on CPI.


    RPI (using September 2018 rate of 3.3%)

    CPI (using September 2018 rate of 2.4%)

    2-year Index-linked Savings Certificate



    3-year Index-linked Savings Certificate



    5-year Index-linked Savings Certificate



    These are illustrations only, so they don’t take into account your individual circumstances. They assume that you don’t make any withdrawals during the term.

    The rates of inflation can go up or down so the illustrations are not a guarantee of the return you will receive. The actual return you receive will depend on the levels of the relevant index that apply at the start and end of each investment year.

  • What is the difference between RPI and CPI?

    Both the Consumer Prices Index (CPI) and the Retail Prices Index (RPI) measure inflation. Each aims to measure the changes in the cost of buying a 'basket' of products and services, but they cover different items and there are differences in the formulas used.

    To find out more about CPI and RPI, visit the Office for National Statistics website at and search for CPI All Items Index or RPI All Items Index.
  • Will this affect my existing Certificates?

    No, it won’t affect any existing Certificates you have until the end of the investment term. However, if you decide to renew any Certificates that mature on or after 1 May 2019, your index-linking will then be calculated using CPI not RPI.

  • If I renew at maturity will it be on the RPI or CPI?

    If you decide to renew your Certificate on or after 1 May 2019, we will calculate your index-linking using the Consumer Prices Index (CPI) instead of the Retail Prices Index. The CPI is generally lower than the RPI, so this means you will probably receive a lower return.