Index linked savings

Index-linked savings accounts are financial products designed to protect your savings from inflation by tying the interest rates they offer to a specific inflation index, such as the Consumer Price Index (CPI). In the UK, the name is often synonymous with National Savings and Investments (NS&I) index-linked savings certificates, which are no longer available to new savers. Explore your options for maturing certificates and find out what you could do next. 

Simply put, index linking means that a financial product is tied to inflation, specifically an inflation index, such as the Consumer Price Index in the UK. Index linked savings accounts have been available in the past, as well as some policies, bonds and pensions, and these would increase or decrease annually to match the current rate of inflation.

An index linked savings account, also known as an index linked savings certificate, is an inflation-linked bond that was offered by National Savings and Investments (NS&I). You may also hear the certificates informally referred to as Granny Bonds because they were originally only available to savers who were over the retirement age. These bonds are no longer available to buy, and are only available to renew if you already own them.

No, index-linked savings accounts are no longer available in the UK after general sales were permanently withdrawn in September 2011. If you hold existing NS&I index-linked savings certificates, you may be able to renew them. But if you are a new saver, you will no longer be able to purchase these products. 

If your current certificate is nearing its maturity date, you generally have a short window to make a decision.

To make sure your money continues working hard, consider this simple checklist:

1. Check your current renewal rate: Review the official extension terms offered by NS&I for your specific maturing index-linked certificate.
2. Compare with the wider market: Look at the wider savings market to see if fixed rates provide better yields over your preferred term.
3. Consider Tax-Free ISAs: Evaluate whether moving funds into a Cash ISA fits your overall tax planning strategy for the current financial year.

Choosing between an index-linked certificate and a fixed-rate savings account comes down to predictability versus inflation protection. An index-linked return fluctuates alongside the UK economic climate, whereas a fixed-rate bond gives you a pre-determined, predictable return from day one.

The table below illustrates a theoretical comparison based on an initial deposit of £10,000.00 over a 1-year term:

Fixed rate bonds from Raisin UK partner banks are protected up to £120,000 per bank and per depositor under the statutory Financial Services Compensation Scheme (FSCS). Historical or theoretical examples are for illustrative purposes only and do not predict future performance. These rates were correct at the time of writing in September 2026. 

An index linked pension means that your pension rises in line with inflation. Since 2010 this has been based on the Consumer Price Index, but previously it was linked to the Retail Price Index. This means that the pension is protected from increases in the cost of living. In the UK, teachers and the police typically receive this type of pension.

Index linked is not the same as inflation, rather, it means it is linked to the rate of inflation, specifically CPI, which is the main inflation measure in the UK. It is calculated by the Office for National Statistics (ONS) and an updated figure is released each month.

Examples of index linked products include the now-defunct NS&I index linked savings certificate, and the Teachers Pension, which is index linked to protect it from the effects of inflation.

Yes, the NS&I Index-linked savings certificates were free from UK income tax.

If your index-linked certificate is reaching maturity and you want a predictable return, a fixed-term savings account might suit your needs. Fixed rate bonds offer a set interest rate for a fixed period, which can help you plan your finances with clarity. However, if inflation rises above your fixed rate, the real purchasing power of your money will decrease. Through Raisin UK, you can easily compare and open competitive fixed rate bonds from a variety of partner banks, all in one place. Importantly, your eligible deposits are protected up to £120,000 per bank and per depositor under the statutory Financial Services Compensation Scheme (FSCS).