On April 29, NS&I released new issues of index-linked bonds which pay 1 per cent above inflation as measured by the retail price index. But advisers say consumers may believe they will get higher returns as they may think the Treasury-backed certificates are based on the Government’s target measure, the consumer price index. The CPI stood at 2.9 per cent in March while the retail price index was -0.4 per cent.
Chelsea Financial Services head of investment products Matthew Woodbridge says: “It is confusing. People may think they are going to get 2.9 per cent plus 1 per cent.”
AWD Chase de Vere Julie Smith head of protection and structured product research says: “What could be considered as misleading is though NS&I clearly states it index-links against RPI, the Government uses the CPI as a measure of inflation.”
Lowes Financial Management managing director Ian Lowes says: “This is evidence that those with the best intentions can fall into the trap where they could be accused of potentially misleading marketing.”
A NS&I spokeswoman says: “The RPI is a recognised measure of inflation and the one we use. We have always been very exp- licit in the past and now in ens- uring that savers, our customers and IFAs are aware that the certificates are linked to RPI.”