UK Readers: Last Chance For A Guaranteed Inflation-Beating Investment

I have long feared that inflation will rip through our savings, sooner or later. Possibly there will be deflation first, but our various feckless governments will eventually try to repair their dodgy budgets by stealing value from our savings. In fact, it's already happening, if you look at the derisory interest on bank accounts, which after tax and compared with iffy official figures on price inflation means your cash is rotting.

But thanks to bloating the banks with bailouts, government bonds have little or no or negative yield, and stocks are a-bubbling on the basis of great earnings they will show when, er, and here's another social media app I'm ready to go IPO on, fill your boots etc. Buy a house and rent it out? You can't lose, can you? Gold, surely (but how do you get it through the airport scanners?)

This is why, five years ago, I started a long and fruitless correspondence with my then Member of Parliament to get the Government to reinstate its inflation-proofed National Savings certificates, which were introduced in 1975 as "an act of belated social justice to millions of people who have seen their savings irreversibly damaged during the recent rapid rise in the rate of inflation." []

But my MP, whose political friends were (in 2012) in cahoots with the ruling Conservative (hah!) Party, seemed unwilling to ask a simple question at Prime Minister's Question Time. Tried pushing a mule? And the written answers I got from ministers was a worrying indication of the brainpower guiding our national ship.

However, some of you may be able to turn our rulers' desperation to advantage, if you act fast. They're offering the opportunity to make a lump sum payment to increase your State Pension by £25 a week, if you're a woman born before 6 April 1953 or a man born before 6 April 1951:

Big deal, you may say. After taking into account 20% income tax, it may take 20-odd years to get all your money back out.

But if we get 1975-scale inflation... (and what makes you think that's the worst possible?)

Yes, there's lots of ways to skew calculations of RPI, but when prices balloon enough they can't all be hidden under hedonic adjustments.

And please let's have National Savings Index-Linked Savings certificates back ASAP. I smelt a rat when withdrawing them was almost the first act of the new Coalition Government in 2010: a statement of ill-intent, if you like.

Americans: your crazy government is still offering Treasury Inflation-Protected Securities (TIPS). Is there that much of an economic disconnect between the US and Yoorp?

Note the disclaimer below. I'm no longer an IFA, this isn't advice, everything could be wrong, I know nothing, and compo lawyers can get stuffed and fly to Mars. All I can tell you is, I've explained it to my wife and she likes the idea. We have until April 5 (i.e. the end of this tax year) to apply.

Further disclaimer: I'm not sponsored by Russians, or as far as I know hacked by them. The FBI did once electronically swing by my blog in 2007 when I started on about the coming financial crisis (what did I know, 20,000 professional economists knew better until they suddenly didn't), but so far no visit from the Men in Black; unless they deployed the neuralyser, of course.

Disclosure: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for ...

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