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Isa's and looking to the future

I have accumulated a fair amount of Virgin ISA income bonds units over the last few years, over this period they have cost me approximately between £1.10 and £1.20 each. I now draw the income (interest) out each year.What I would like to know is if inflation doubled over the next twenty years is this investment also likely to double or will the price keep approximately the same (ie £1.10 to £1.20). I base this question on the financial and money market circumstances being the same in twenty years time as they are now. In other words is my initial investment only going to be worth half as much after inflation, in real money terms.

Thanks

Reply to
alan kearn
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Thanks

I suggest that, if you are not reinvesting the income, the value of the units will remain more or less static, i.e not keep pace with inflation.

Why did you go for Virgin? There are (arguably) better ones out there.

Rob Graham

Reply to
Robin Graham

Bitstring , from the wonderful person alan kearn said

Not sure what you mean by 'inflation doubling' .. if you mean a loaf of bread costs 2x what it does today (that is RPI doubling .. inflation is normally talked about as the 'rate of change in RPI') then nope, income bonds are not going to go up (unless you re-invest the income) to match.

If you really mean the =rate= of inflation doubling (from the current ~3% to 6% / yr) then income bond values would probably go down .. people would want higher %age returns on investment, and that drives the base price down.

Reply to
GSV Three Minds in a Can

from

GSV Quote if you mean a loaf of bread costs 2x what it does today (that is RPI doubling ..

Yes that is what I meant the 5% i get at present is not very good it is a good thing it is protected from tax I will have to take only half of the yearly income out leaving half to help keep the capital value. Thanks Alan

Reply to
alan kearn

inflation.

Rob

When i first invested in them the return was not very good but they were pretty safe Thanks Alan

Reply to
alan kearn

When i first invested in them the return was not very good but they were pretty safe

No, I mean other ones equally safe.

Rob

Reply to
Robin Graham

In message , alan kearn writes

That doesnt answer the point Rob has made. There are better ones (arguably) that are just as safe but perform better.

Reply to
john boyle

Bitstring , from the wonderful person alan kearn said

Depends how much cash you want left in your ISA when you die, I guess. Since that sum is rather hard to do, in advance, if you want an income you might be better off with a purchased annuity (guaranteed nothing left when you die (unless you take a protection option), but in the meantime you can take an inflation linked income, for however long you live).

Back to finance basics - what are you trying to achieve, exactly ('saving tax' is not a suitable answer) .. extra income, lump sum for the kids, safety net for the wife, saving for the round the world cruise .. pick one!

Reply to
GSV Three Minds in a Can

I wanted to get virgin originally because I was new to it all then (that is, earlier this year!) and I'd heard of them. I went for Legal and General UK Index instead, because when I got the virgin stuff in the post to read and I noticed that they didn't give any real details as to what I was actually signing up for. I think the L&G one is cheaper, too.

ETFs look interesting, though. Anyone know if they're the best way of getting exposure to indexs in foreign (far east) markets?

Reply to
Alex

So you haven't actually got Virgin, you've got L&G?

Rob

Reply to
Robin Graham

Yes. (And I'm not sure where my post got to - perhaps I pressed the wrong button. Very odd.)

Reply to
Alex

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