One of the main problems about investing in UK premium bonds is that punters don't often win. This makes them a poor hedge against inflation. Now, the odds over winning a prize have sharply got worse over the year. However, if there is deflation then premium bonds won't suffer as much from inflation as in the past. Over the last few years I have spent money on them and overall premium bonds have been disappointing performers. However, they could be a short-term punt over
2009 and with the government guarantee of getting your money back, that is a pretty powerful incentive in these times of troubled banks. Don't expect to win.
www.searchifa.co.uk
In actual fact I don't expect real deflation in terms of actual falling prices. Inflation indices are artificial constructs and the ones we have don't measure city or regional differences. For instance, if petrol prices go down, they are still expensive (mainly comprising taxes in Great Britain). Fares are going up above inflation and council taxes will also increase over inflation.
If the retail price index did go down, would the modest state pension be modified downwards as well? Of course not but there could be pay cuts in the private sector as
exemplified by JCB.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment