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Best multi-asset funds

Updated by The Accumulator on April 1, 2025

Do you like simplicity? How about convenience? What about spending nearly none of your time on investing but getting on with your life instead?

Then multi-asset funds are made for you.

In this post, we’ll help you choose the best multi-asset fund for your situation. You’ll learn how they work, and we’ll offer some thoughts on what features matter.

What are multi-asset funds?

A multi-asset fund (also known as a fund-of-funds) offers you an instant portfolio with a single investing purchase. Instead of painstakingly choosing your own equities, bonds, and other assets, you accept the fund manager’s selection.

The manager will diversify you across the major asset classes. They’ll also handle rebalancing and swallow the complexity of portfolio management.

A fund-of-funds is so-called because it wraps several specialised funds into one neat investing package.

Each individual fund gives you exposure to a different sub-asset class. For example, one fund will invest in US stocks. Another in the UK. Yet another in the Emerging Markets.

A multi-asset fund is essentially a meal deal. You may get a heartier helping of corporate bonds, say, than you’d otherwise have chosen, but that’s the trade-off.

You relinquish control on the grounds that the manager’s choice will provide a positive experience, minus the hassle of making all the decisions yourself.

How do fund-of-funds work?

Fund-of-funds invite you to focus on the most fundamental decision in investing: how much risk do you want to take?

Each multi-asset fund in a given range corresponds to a different risk level. You pick the fund that best fits your risk appetite. You then simply choose how much to invest and leave management to get on with it.

The risk levels are typically labelled something like:

Cautious
Moderate
Balanced
Growth
Adventurous

The higher your risk level, the more equities and fewer bonds your chosen fund-of-funds contains.

An adventurous fund may be 100% equities. A cautious fund can be as high as 80% bonds.

Risky business

Risk levels are predicated on the risk-reward trade-off.

This investing theory holds that higher rewards accrue over time to investors who bear more risk.

The empirical upshot is that equities have typically been the best asset for growing wealth over the long term. That’s because investors have demanded a premium for putting up with their volatility and periodic crashes.

The downside of taking risk? Your investments can be underwater until the market recovers.

That’s where bonds come in. High-quality government bonds can moderate stock market losses. But their crash protection doesn’t always work. And it usually curtails growth somewhat.

A risk-averse investor – perhaps one who’s older and more interested in wealth preservation – should choose a multi-asset fund towards the more cautious end of the spectrum.

On the other hand an investor who’s gung-ho for growth is liable to have a large risk appetite. Perhaps because they’re confident they’ll ride out temporary setbacks without panicking about paper losses.

Going back to the meal deal analogy, picking the riskiest multi-asset funds is like telling the chef you’re up for his extra hot spicy curry. Despite knowing it’s almost certain to give you a squeaky-bum-time at some point.

If you’ve no idea how to even begin to choose your level, see our piece on risk tolerance.

The middle fund-of-funds in each range usually approximates the 60/40 portfolio.

Best multi-asset funds

Here’s my pick of the best multi-asset funds available:

Multi-asset funds range	Passive or Active?	OCF (%)	Watch out for	We like
Vanguard LifeStrategy	Passive	0.22	Home bias	High proportion of government bonds
Fidelity Multi Asset Allocator	Passive	0.2	–	No home bias Small cap equities Property
HSBC Global Strategy Portfolio	Active	0.19-0.22	–	No home bias Property
Abrdn MyFolio Index	Active	0.2	Home bias Junk bonds Low government bonds	Property
VT AJ Bell Funds	Active	0.31	Home bias Junk bonds Low government bonds	–
Legal & General Multi-Index Funds	Active	0.31	Home bias Junk bonds Low government bonds	Property Index-linked bonds
BlackRock Consensus Funds	Active	0.22	Home bias Very low US Very low emerging markets	–
BlackRock MyMap Funds	Active	0.17	Junk bonds	No home bias Commodities
Schroders Global Multi-Asset Portfolios	Active	0.21	Home bias Low government bonds	Commodities

Source: Monevator research

The table lists the multi-asset fund ranges I think merit further investigation.

The best fund-of-funds for you is a personal decision.
Your choice from any particular range should be guided by your risk tolerance.

But how would I choose the best multi-asset fund for me?

Fund-of-funds fundamentals

Above all, I believe most investors benefit from a passive investing strategy.

Hence the top spots go to the two multi-asset fund ranges that adhere reasonably well to a passive approach.

This means their asset allocations aren’t likely to change much while you’re not looking. Moreover their portfolios consist mostly of index trackers.

The other multi-asset funds in the table also hold lots of index trackers. But the difference is they employ active management.

An active mandate gives the managers licence to change your asset allocation.

Some operate within wide risk bands, too – some fund-of-funds can contain anywhere from 40% to 85% equities.

This flexibility sounds like a strength. But it’s often counterproductive in practice, because even the experts’ powers of prediction are weak.

The ‘sell’ is that a skilled manager has the potential to deliver great performance while protecting their investors from downside risk. That claim is mostly a vain hope, as we’ll see in a moment.

Overall, active management is likely to be a less effective strategy for most people.

Of the passive multi-asset funds, the Vanguard LifeStrategy range is the clear leader. Its balance of sensible asset allocation, consistency, reasonable cost, and long-term returns make it a great choice.

Every other contender on the list must really be viewed as an alternative to Vanguard LifeStrategy.

That said, you may want to consider putting some money into a Vanguard LifeStrategy alternative once your portfolio has grown large enough that it makes sense to diversify your fund manager risk.

You don’t want all your eggs in one basket, in short. Our investor compensation scheme piece explains more.

A couple of additional notes on the table:

OCFs listed are based on the best available fund share class that’s accessible via UK brokers on a non-exclusive basis.

Add your fund’s transaction costs to gain a full picture of its total charges.

Multi-asset funds: what to watch out for

There are many ways to rank funds.

Counterintuitively, recent results aren’t foremost among them. Primarily because as all the fund literature baldly states: “Past returns are no guarantee of future performance.”

For that reason it’s better to pick an option that best suits your circumstances and is geared towards investing best practice.

All things being equal:

Passive is better than active
Low cost is better than high cost
Property, small cap equities, index-linked bonds, commodities, and gold are good diversifiers
Junk bonds and thematic investments are highly questionable diversifiers

Home bias1 has resulted in many of the fund-of-funds holding more UK equities than investing theory suggests is optimal.

Multi-asset funds that overweight the UK are usually underweight US equities, too. This posture may work for or against you, depending on the whims of the market gods. But as a deliberate choice it makes most sense for retirees with bills to pay in the UK, or if you believe the US market is dangerously overvalued.

Note that fund-of-funds typically carry only small payloads of index-linked bonds. The funds rely on equities as a long-run inflation hedge instead.

Inflation is a big concern for retirees. If that’s you, then consider target-date funds with stronger anti-inflation defences.

Beware trivial asset allocations. Holding 2-3% of something won’t make much difference to your return. However it may help the fund look more sophisticated!

Fund-of-funds and corporate bonds

A fund’s allocation to corporate bonds is worth investigating if you’re choosing an alternative to Vanguard LifeStrategy.

Many multi-asset fund ranges include a large percentage of corporate bonds in their asset mix.

And while bonds are generally assumed to reduce risk, whether they do so depends on the type of bond:

High-quality government bonds are reasonable hedges against a stock market crash. (High quality means a credit rating of AA- and above)
Corporate bonds – even when dubbed ‘investment grade’ – are less useful in a crisis
High-yield (or junk) corporate bonds typically heighten risk – much like equities

So pick a fund-of-funds with a strong government bond asset allocation and credit rating if you want to keep a tight rein on risk.

That may mean dropping down a risk level or two if you’re set on a fund that devotes the lion’s share of its bond allocation to corporate debt.

UK multi-asset funds results check

Source: Trustnet Chart tool

The results comparison above compares the UK fund-of-funds that are closest to a 60/40 equity/bond split in each range.

We already know that past performance does not predict the future. But it’s still worth checking the five-year and ten-year timeframes. Do any trends pop out?

For example, over ten-years the passive Vanguard LifeStrategy 60 has comfortably beaten its active management rivals, apart from HSBC Global Strategy Balanced.

This result is a microcosm of the entire passive vs active investing debate.

If you pick any broad market, you will likely find active funds at the top and the bottom of the league tables.

Most passive funds, meanwhile, usually loiter somewhere in the top half.

The problem is that the table-topping active funds regularly change. To benefit from the winners, you have to be able to choose them ahead of time. There lies the rub, and sadly picking the winners is much harder than plumping for whoever has done well of late.

That said, Global Strategy edged Vanguard LifeStrategy by 0.2% when we first began tracking multi-asset funds six years ago.

Three years ago, Global Strategy eked out a 0.4% lead over LifeStrategy while now the gap is 0.6%.

So Global Strategy has consistently delivered over that timeframe (which is still short in the scheme of things) and seems like a well-run fund.

Short termism

Five-year returns are the minimal viable comparison period in my view – a blink of an eye in investing terms – and not long enough to draw firm conclusions from.

Over the stubbier time-frames, short-term management decisions can pay off for a while.

For example, the Abrdn MyFolio Index III fund currently holds 75% equities – at the very top end of its range for risky assets.

That move has juiced its returns for now. The fund boasts the best one-year return in the table. But very few managers enjoy 10-year winning streaks. They tend to fall back into the pack over time.

That’s why the 10-year return is a much better test of prowess. Mistakes tend to cancel out temporary runs of good form.

The benchmark

I’ve added the IA Mixed Investment 40-85% returns to the table, inside the green dotted lozenge. These numbers show the average return for all funds belonging to this category, and are a reasonable yardstick for comparison.

(The Investment Association, or IA, is the trade body that represents the UK’s investment management industry.)

Because this category is dominated by active funds, you can see that many investment professionals aren’t adding value over ten-years, given that the passive Vanguard LifeStrategy 60 comfortably surpasses the 4.9% average.

But it’s actually worse than that.

The DIY passive alternative to holding multi-asset funds like these is to run a two-fund 60/40 portfolio.

For example, you could have:

60% in global equities
40% in global bonds hedged to GBP

Rebalance every year and you’d enjoy a portfolio that captures the bulk of the risk-reward trade-off offered by the funds-of-funds in the table.

Over 10-years, that 60/40 portfolio2 delivered a 6.3% annualised return.

You would think that the vast majority of skilled active managers could best such a simple portfolio. Yet they have not.

ESG multi-asset funds

Most multi-asset managers also now offer fund-of-funds with an ESG spin.

It’s extremely difficult to verify ESG credentials. Hence we’ll just offer a few leads for further research:

BlackRock MyMap Select ESG
Legal & General Future World Multi-Index
Abrdn MyFolio Enhanced ESG

Vanguard’s candidate is its SustainableLife Fund range. But this fund’s holdings are too concentrated for my liking.

Also, all of the ESG options above are actively managed.

Multi-asset ETFs

A handful of multi-asset ETFs trade on the London Stock Exchange. JustETF maintains a good list.

iShares’ Portfolio ETF range is worth a look.

The rest are either too narrowly focused, expensive, or new to make the table for now. We’ll keep an eye on them though.

The Swiss army knife of investing

If managing your investments makes you want to stick pins in your eyes then rest easy – a multi-asset fund is a good way to get the job done.

Choose a fund loaded with equities to take more risk in pursuit of higher rewards. Or opt for a fund-of-funds with more bonds for a smoother ride.

Ultimately, it’s your topline equities/bond split that will count most towards your long-term result.

Go for the extra bells and whistles if you believe the evidence. But don’t be fooled into thinking that more always means better.

Take it steady,

The Accumulator

The tendency of investors to have an overweight holding of shares listed in their own country. [↩]
60% IMID ETF, 40% XGSG ETF [↩]

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Weekend reading: No green shoots in this Spring Statement

by The Investor on March 29, 2025

What caught my eye this week.

A lot of water has flowed under Westminster Bridge since a UK chancellor was able to stick to their plans for a year.

Rachel Reeves didn’t even manage that.

Since her Budget last October – and contrary to previous aspirations to return to a once-a-year cadence – we’re told the numbers had already changed enough that something had to be done.

And so in the Spring Statement we learned that while years-away economic growth will now apparently be higher, this year’s forecast has been halved: to GDP growth of 1%.

As Paul Johnson of the Institute for Fiscal Studies noted:

The fact that a fairly run-of-the-mill change to the forecast forced her to cut her spending plans reflects the tiny amount of headroom she chose to leave against her targets last October.

Indeed I’d argue we’re seeing ‘iron rule theatre’, where the chancellor pretends she can micro-manage the fine margins of tax-and-spending outcomes, even as the world rages around her.

In reality there is no headroom outside of a Number 11 tweak-and-refresh in Excel:

Source: FT

Home and away

Reeves partly did this to herself.

Having tied her own hands before last year’s election by ruling out touching the big revenue-raising levers, her October Budget tax grab foolishly targeted a business sector already battered by successive waves of crisis.

The resulting National Insurance hikes will almost certainly cause employment to be lower – by making jobs more expensive from April – and it’s also hit confidence for six.

And with the OBR downgrading 2025 growth from 2% to 1%, there’s no gung-ho economy riding to the rescue.

The West Wing

On the other hand, the man in the White House and his ripping up of the rulebook is rattling markets and business leaders globally, too.

Along with his counterpart in Moscow, Trump is forcing Europe to rethink post-war norms on everything from defence spending to borrowing costs to trade partnerships – not to mention who has our back in a nuclear showdown.

Now some might say this was all predictable when Reeves rose to speak last October. A Trump victory in November’s US election looked near-certain by then.

But I’d argue that even so, all we could be sure of was a return to government by reality TV show plot twist.

And as things have turned out this season is even crazier than the last one. (Where’s Mike Pence when you need him?)

The fact is nobody viewing this drama agrees on where we’ll end up on tariffs and Ukraine – not even Trump’s acolytes – let alone factors beyond his immediate control but absolutely subject to his whims, such inflation and bond yields.

Neighbours

Perhaps Reeves’ technocratic reforms will deliver growth eventually. The construction industry seems genuinely impressed by Labour’s push on planning, for instance.

In fact across Europe a welcome side effect of the White House telling the continent it’s on its own could be a slaying of sacred cows on regulation, especially in the tech sector.

But honestly, it’s hard to see the economy catching fire anytime soon.

That’s not to say it won’t. Maybe Germany taking the brakes off spending or an end to the immediate conflict in Ukraine could revive animal spirits. Or perhaps inflation dying a speedier death than forecast, and rates falling faster.

But continuing to bump along the bottom seems the most probable outcome.

And then there’s Brexit, which everyone else has given up on mentioning.

The UK economy is £100bn to £140bn smaller than it would have been, thanks to Brexit.

Hence government tax receipts are £30-40bn lower every year as as a consequence.

Recall: the fiscal headroom Reeves is so concerned about is only £10bn.

When taxes rise again or welfare is cut, remember Brexit. It’s impact doesn’t go away just because we’re bored of it or because other stuff happened too.

Brexit is permanent grit in the UK’s economic engine.

Auf Wiedersehen, Pet

Lots of pundits are warning us to expect more tax hikes later this year.

If so, it’ll mean more stealthy stuff like freezing personal allowances for longer or cutting the ISA thresholds. Raising headline tax rates after all this would be suicidal.

But really, the cupboard is bare. Allowances for capital gains and the like have already been cut to the bone. The inheritance tax push on pensions has happened. Maybe the CGT rate could be hiked again, but that won’t raise much money.

You can see why many on the left want a wealth tax (link below) but non-doms and other wealthy types are already fleeing the UK.

Poorer people will be feeling the worse of it, but the middle-class is clearly saying enough is enough on taxes, too.

Eldorado

If I were Reeves I’d maybe cut stamp duty on housing transactions to a flat 1% and go harder and faster on home building.

There’s urgent need here, and a solid growth multiplier from an old-fashioned housing boom. If more housing availability kept the lid on house price growth, so much the better.

It’s not clever or pretty but it’s worked before. Short of rejoining the EU by Christmas, I can’t see much else delivering a speedy shot in the arm.

Reeves did announce a £13bn infrastructure package in the Spring Statement. This includes £625m to train up to 60,000 skilled construction workers.

Even so, getting 1.5m homes built anytime soon will require a wartime push to ready the missing bricklayers, carpenters, and plumbers. Such combined-arms coordination seems beyond our modern politicians.

So stagger on we must.

Look out for your own future prosperity – not least by filling your ISAs and your pensions – because you can be sure that nobody else is.

More Spring Statement bits and pieces:

Government confirms it’s looking into reform of cash ISA allowances – Morningstar
Five things we learned from the Spring Statement – Which
Brace for tax rises in the autumn? [Search result] – FT
Self-employed given harsher penalties for late tax payments – This is Money
NS&I boosts targets in Spring Statement – This is Money

Have a great weekend!

[continue reading…]

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The pain game [Members]

For MOGULS by The Investor on March 28, 2025

Want to beat the market? Then you must do something different to the market. Both in terms of tactics and strategy, and in that your resultant portfolio will look different to the market and so deliver – for good or ill – differentiated returns.

Of course, most professionally-managed funds do not beat the market, nor the index trackers that simply try to match it.

This article can be read by selected Monevator members. Please see our membership plans and consider joining! Already a member? Sign in here.

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NS&I Index-linked Savings Certificates – should you keep them?

Updated by The Accumulator on March 25, 2025

NS&I Index-linked Savings Certificates are precious assets for private investors to own.

Do you have any NS&I Index-linked Savings Certificates? Are they approaching maturity? Are you wondering what to do with them?

The product’s attractions have deteriorated in recent years, so renewing your certificates may not be the no-brainer it once was.

On the other hand, inflation is back and proving stickier than a toddler wielding jammy doughnuts. And if that’s a concern for you then there are still good reasons to keep even today’s atrophied Index-Linked Saving Certificates in your portfolio.

Let’s recap the main features of Index-Linked Certificates. We’ll consider the pros and cons of renewal after that.

How do NS&I Index-linked Saving Certificates work?

National Savings and Investments’ Index-Linked Saving Certificates are a unique fixed-term savings product.

The important features are:

Protection against inflation – Index-linked Savings Certificates safeguard your savings from inflation. The amount you have in them grows in line with the UK’s Consumer Prices Index (CPI), maintaining your purchasing power as prices rise.

Deflationary floor – Unlike index-linked gilts, your certificate’s value will not shrink if the index declines during the term. Instead, your savings’ nominal value remains unchanged if deflation occurs. In fact it will actually grow in real-terms and you’ll still receive interest on top.

Tax-free – Both the inflation-linked returns and the fixed interest are exempt from UK income tax and capital gains tax. Certificates’ tax-free status means they don’t take up room in your ISA or SIPP nor eat into your personal tax allowances. You don’t need to declare them or do any tedious paperwork.

Government guaranteed – National Savings and Investments is the UK government savings bank. Consequently, Index-linked Saving Certificates are as safe as investing gets because they’re 100% backed by HM Treasury.

You cannot lose money – Index-linked Savings Certificates are not potentially subject to capital losses, unlike bonds. In this sense they act like other cash savings products.

Fixed terms – Your money is locked up in Index-linked Saving Certificates for fixed terms of two years, three years, or five years. (Two-year terms are only available if you roll over an existing two-year certificate.)

Fixed interest rate – Currently you get 0.01% on top of the index-linked inflation adjustment. This is a fixed rate that is guaranteed not to change during your term.

No longer available – You can only renew existing Index-linked Saving Certificates when they mature. The Government hasn’t made new issues available since 2011! It shows no sign of changing course. This means Certificates can’t be replaced if you cash them in.

NS&I index-linking explained

With Index-linked Saving Certificates your savings are adjusted each year – on the anniversary of your investment – in line with movements in the CPI index.

The fixed interest is then calculated on your inflation-adjusted savings (not the original amount).

In this way both capital and interest keep pace with inflation.

Index-linking is applied annually, and is reinvested into your Certificate to compound over the term.

There’s no annual payout: you receive your initial savings + index-linking + fixed interest at maturity.

Here’s a quick example of how index-linking works:

CPI index = 100 (Index figure two months before the start of your certificate’s investment year.)

CPI index = 105 (Index figure two months before the end of your certificate’s investment year.)

105 – 100 / 100 = 0.05 (5% rise in CPI inflation over the last 12-months.)

The formula for the percentage increase is:

New index figure minus old index figure / old index figure * 100.

Your savings grow by the index-linked amount:

£1,000 * 1.05 = £1,050

Plus 0.01% fixed interest:

£1,050 * 1.0001 = 0.105 (10p)1

Total = £1,050.10

As you can see, the interest rate is now derisory. But the index-linking makes a considerable difference when inflation is high.

How have NS&I Index-linked Saving Certificates features deteriorated in recent years?

No early access – You’re now completely locked in to your Index-linked Saving Certificate for the entire fixed period if its term began on or after 23 July 2023. If your Certificate’s term started before 23 July 2023 then you can cash in the product early – in exchange for the loss of 90 days’ interest and that investment year’s worth of index-linking.

If your old-style Certificate allows early access then do it as close as you can to your “anniversary date.” At that point your index-linking is added and a new investment year starts. Thus if you cash in a month after your investment year begins, you’ll only lose a month of uplift. Cash in one month before your anniversary date, and you’ll lose 11 months of index linkage.

Index-linked to CPI not RPI – The inflationary uplift used to be linked to the Retail Prices Index (RPI), not CPI. RPI inflation is typically higher than CPI, but this older measure is gradually being phased out in government and across a range of financial products.

Terrible interest rate – The interest rate has progressively worsened and is pretty much irrelevant today. But that doesn’t mean you should necessarily ditch your saving certificates, as we’ll see.

What are my choices when an Index-linked Saving Certificate matures?

It’s pretty straightforward:

You can let it automatically roll over into a new Certificate of the same term
Or select a different term, as long as it’s either three-years or five-years
Or take the money and run

You can also withdraw some of your money while reinvesting the rest.

Splitting your reinvestment money between different terms is also an option. The minimum reinvestment amount is £100 per Certificate.

What you cannot do, sadly, is invest any new money.

NS&I Index-linked Saving Certificates interest rates

Index-linked Saving Certificates offer a 0.01% fixed interest rate, regardless of which term you choose.

That’s a pitiful return. But it’s better to think of it as a:

Tax-free, inflation-matching rate + 0.01%

To contextualise how good that can be, remember that CPI 12-month inflation was 10.5% in December 2022.

A non-taxpayer earned 10.51% on their Index-linked Saving Certificates during that period
So a basic-rate taxpayer required an asset yielding 13.13% to match that rate
A higher-rate payer would have needed a 17.52% return to keep up

You couldn’t get that from any bank account. Indeed you couldn’t get it from equities either. They posted a loss that year.

Inflation has subsided since 2022 but it hasn’t gone away. Inflation can also flare up shockingly fast – despite lying dormant for decades – as the post-Covid inflationary surge taught us.

Are NS&I Index-linked Saving Certificates a good investment?

A good investment should hit as many of these bases as possible:

Offer the potential for real returns2
Play a valuable role in your portfolio
Diversify your sources of risk
Be low-cost, transparent, and easy to understand
Protect your wealth during bouts of inflation or deflation

When measured against these criteria, Index-linked Saving Certificates are a fantastic investment.

They do provide a real return, though at 0.01% a year they only just break even against inflation.

Indeed, other major asset classes have historically offered better returns than 0.01% over the long run.

But the crucial difference is that the Index-linked Saving Certificates’ real return is guaranteed. Cash locked up in Index-linked Saving Certs will match inflation every year.

In contrast money market funds posted a real-terms loss nearly every year from 2009 to 2023 (inclusive, with the only exception being a tiny win in 2015).

Most bank accounts failed to keep up with inflation during that period, too.

Meanwhile, equities, bonds, gold and every other asset class you care to mention are volatile. They can be struck by bear markets that last for years on end.

Whereas from the perspective of a diversified portfolio, Index-linked Certificates are completely unaffected by and uncorrelated with whatever is rocking other assets’ world – for good or ill.

Inflated expectations

Straightforwardly, the truly invaluable role that Index-linked Certificates play in your portfolio is as an inflation hedge.

Very few assets properly hedge inflation. And the best alternative – index-linked gilts – is much more complicated.

High inflation is a deadly foe and NS&I Index-linked Saving Certificates counters it on unbeatable terms. No other inflation hedge can give you a guaranteed real return with no capital downside along the way.

Of course, there’s every chance that inflation could fall away and interest payable on ordinary savings accounts offer a greater return over the next five years.

But that is not the point.

The idea with insurance is to take it out before you need it. And these Index-linked Certificates neutralise inflation – as well as deflation – like no other asset.

Nobody knows what inflation will do in the years ahead, which is why central banks frequently misjudge the risk. Yet here we have a super-safe inflation-defeating device that will preserve your spending power.

All for no fee!

Add in the completely tax-free returns and also their simplicity, and it’s easy to see why existing Certificate holders are loath to give them up.

Final verdict: should I renew my Index-linked Savings Certificates?

Renew NS&I Index-linked Saving Certificate if…
You want inflation-proof, tax-free, risk-free capital protection.
You’re risk-averse, or you want to offset equity / bond risks elsewhere in your portfolio.
You can commit for three to five years with no access needs.
You value peace of mind more than investment performance.

Consider alternatives if…
You want higher nominal returns and can take the risk you may not get them.
You might need access to your funds.
You strongly believe inflation will be low over your term (and beyond?)
You have plenty of alternative tax shelters.

In short, renewal makes sense when you prioritise stability, tax-efficient wealth preservation, and safety over yield and liquidity.

Bonus sections: certified details

Here’s a couple of additional sections: on the likelihood of new Certificates being offered again to savers, and what happens if you die while holding them.

Are NS&I Index-linked Saving Certificates coming back?

It’s possible that Index-linked Saving Certificates will return. After all, they were first introduced in 1975 to help protect retirees from the ravages of inflation.

However new issues were heavily oversubscribed in the wake of the Global Financial Crisis. Not surprising when bank rates crashed, inflation picked up, and the solvency of commercial lenders was being questioned.

In that perfect storm, real yields on UK Government debt fell into negative territory and it was ultimately cheaper for HM Treasury to raise money via the bond market than through its consumer-orientated NS&I operation.

But the picture has changed since 2022, with yields rebounding.

Two- to five-year index-linked gilts now offer real yields of 0.1% to 0.6%. That’s notably higher than NS&I Index-linked Saving Certificates’ real yield of 0.01%.

In theory then, space has opened up for the Government to issue new Index-linked Certificates. However there’s no word on whether it intends to, nor any obvious political appetite to assist savers against high inflation.

It’s plausible this ongoing lack of fresh availability implies the certificates are so attractive that new issues may still overwhelm NS&I’s fund-raising targets and outcompete the commercial market.

That alone should give you pause before you cash them in…

NS&I Index-linked Savings Certificates on death

Certificates continue to earn tax-free index-linked growth and interest after death.

However, the Certificate falls into the estate of its last remaining holder upon their death and so may be subject to Inheritance tax.

Joint certificates continue to be owned by the surviving holder in the event of their partner’s death.

If you inherit an Index-linked Savings Certificate then it can be transferred into your name.

You should be able to claim the money instead if you so wish. See the NS&I form: Instructions to cash inIndex-linked Savings Certificates on this page.

NS&I lists the information it requires after a bereavement on its website. It accepts photocopies of the original Savings Certificates.

You can trace lost NS&I accounts here.

Note: we’ve updated this article to reflect the status quo in March 2025, but kept the comments below for posterity. Please check the comment date if anything seems odd.

NS&I rounds down in its latest Summary box example. [↩]
Positive returns after inflation including interest payments. [↩]

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