Gestaltz

A slight change in focus can produce a profoundly different understanding https://twitter.com/gestaltz

Asset Allocation and Bet Size

The most important decision any investor makes is the cash to risk assets ratio. In my blogs I have repeatedly asserted the validity of 70% cash v 30% risk assets. Most have regarded my allocation as overly conservative. A paper published in the Journal of Portfolio Management suggests it might even be aggressive. The Paper, Rational Decision Making under Uncertainty: Observed betting patterns on a biased coin by Victor Haghani and Richard Dewey, is worth a read. It is very accessible though the concepts will be alien to non-finance professionals. A link can be found on the Elm Funds website which is a very interesting source of information.

The thrust of the paper is that if you have a prospect with a positive expected value then you should invest (bet) a constant fraction of your investable wealth. They refer to the Kelly* formula which is 2xp-1, where p=the probability of winning. This assumes utility from playing the game takes a particular form but this is not critical to the argument. If you believe there is a 65% chance of your bet or investment paying off then you bet 2×0.65-1 which equals 0.3 or 30%. Of course, equity investment is a long way from a binary betting game but the principle is similar.

The logic of the approach is that if you bet too much you could run out of money and if you bet too little it is sub-optimal. The Kelly formula gives you some way of getting a handle on how much to bet. Many lifestyle funds use 50/50 as the asset allocation. This implies a 75% probability of positive returns. The logic is that in the long run this is true. It probably is but what if you get an unlucky run over the next few years? It makes sense if you are adding new cash to your portfolio each year so the invested value is growing. It may be too aggressive if you have a fixed wedge to invest for a finite number of years, as do most pensioners.

The other implication is that passive funds may actually be more risky than we realise. The funds match a market value weighted index. Nothing in the Kelly formula or this fine piece of simulation suggests investing more in larger companies. There may be other reasons for doing so, such a liquidity, but a case can be made for equal weight for each individual asset. Unless you have special knowledge about one asset that changes the probability of success there is no probability reason for anything other than equal weights. An index is weighted towards large cap stocks by construction and not their prospects.

So for a fixed lump sum investor, not being too aggressive makes sense. I stick with 70/30. Diversify as widely as possible so that individual asset risks do not overly impact the total portfolio. Where possible opt for equally weighted passive portfolios unless you are not well diversified or have better knowledge of some component assets.

*

Kelly, J.L., Jr. “A New Interpretation of Information Rate.” In The Kelly Capital Growth Investment Criterion, edited by L.C. MacLean, E.O. Thorp, and W.T. Ziemba, pp. 25-34. Singapore: World Scientific, 2012.

Risk Sharing and Social Care

Populations are ageing. Advances in medicine are keeping us alive longer. Unfortunately advances in health have not yet caught up. In part this is a legacy issue. Medicine has focused on treating illness rather than preventing it. This is changing and the pressure on ‘lifestyle’ choices is building. There is also increased research into the link between lifestyle choices and health. We know that obesity, alcohol, cigarettes, pollution, sugar, and salt, can all have detrimental health effects. Much of poor health today can be linked back to these. In a few generations we should see health catch up with progress in longevity. Meanwhile, we have a care crisis.

The logical solution to social care needs is risk sharing. Despite the evident link between lifestyle choice and health there is a large random element still. This is particularly true of dementia in its various forms. The link between lifestyle and dementia is not yet well understood. I had the opportunity to study the disease Alzheimer’s in a course on ‘Brain and Behaviour’ as part of an MSc in Psychology. I was surprised to discover that a confident diagnosis of Alzheimer’s can only be made post-mortem. This does not help in treatment. In fact there is no treatment for the disease as such, only the symptoms. Dementia needs labour intensive care. Moreover, dementia is quite undiscriminating. It can afflict anyone. This is why it is so amenable to risk sharing.

Risk sharing is the core principle of insurance. In a population of N, actuarially we can predict x% will get some form of dementia. The cost of treatment is £y so we all contribute £y/N and get treatment if we are unfortunate enough to be afflicted. The only issue is how should the risk sharing be organised. There are essentially to possibilities; the state or the private sector. The principle of public risk sharing has been accepted for medical needs, despite the lifestyle links, and takes the form of the NHS in the UK. For some reason this is not extended to the care needs arising from dementia even though the link to lifestyle is not yet established. This seems perverse. Someone who falls off a horse and is paralysed will get excellent free care from the NHS but someone that is afflicted by dementia must pay for their own care.

Social care is a legitimate risk for public risk sharing. Indeed it is more legitimate than care needs arising out of lifestyle choices because it is essentially random. The public actuaries should conduct the appropriate analysis and budget accordingly. Moreover there should be no hypothecated ‘care tax’. The blog For the want of a nail… deals with the issues arising from hypothecation. All social care should be funded out of general taxation. The structure of general taxation can be set to meet whatever ideology the democratic process concludes. Care should be, like medical services, provided on the basis of need and free at the point of use. This is what public risk sharing means.

Hypothecation takes us towards private risk sharing. Care is not provided on the basis of need but becomes contingent on contribution. This is the essential difference between pure public and private risk sharing. State pensions are linked to contribution as are some financial benefits. Private insurers pay out contingent on contribution. It is not pure risk sharing though this is part of the actuarial process. Care lends itself most to pure public risk sharing yet is excluded. The reason is fear of the cost. But this is a false fear. Public risk sharing for care is one of the most logical forms of public sharing because of its random nature. No one should object and I suspect will not if the state makes the effort to link risk of dementia to each you

 

 

Understanding Investment Risk

There is a proliferation of bonds offering 7-12% yields. They are often in what seems like a worthy cause (green energy). History is replete with investors stuffing too much cash into high yield investments and then claiming they did not understand the risk. Much of this is simply greed and denial. They cannot help themselves, like addicts. It is also possible that people do not have an adequate grasp of investment risk.

The problem is that much risk discussion is cast in terms of statistics. You will hear of probability distributions,  means, standard deviations, symmetry, normality, fat tails, and even black swans. Not helpful to those that can barely deal with percentages. It is hard to get an intuitive feel for risk in part because it is non-linear. A more intuitive approach might be possible using the idealised frameworks popular in economics and finance.

In economics there is something called the law of one price. An identical goods should trade at the same price. If they do not, an arbitrage is possible. You buy the cheap source and resell into the expensive market and make a killing. The arbitrage process equalizes the prices. Simples! One should apply the same principle to investments. Risk-adjusted they should have the same present value. In an efficient market full of very smart and greedy people, who do understand risk, arbitrage should ensure that this is indeed the case. Let us assume that this applies. What does this mean for Jo Punter?

Compare 1% on a  1 year deposit with a building society up to 85k (essentially free of risk) with 12% on a 1 year unsecured bond issued by some corporate entity. If the market is efficient (in which by definition the law of one price applies) then if you make the two investments a large number times, the average return over all investments will be very similar; basically 1%. In an efficient market risk-adjusted returns are equalised by clever arbitrageurs. In a sense there is no point in investing in anything other than risk-free assets. Except of course that individuals do not, in the short-term, make investments a large number of times.

In the case of the bond you might make 12% next year or you might lose all of your money. If you keep making this kind of investment sooner or later you will lose all or some of your money. You may actually be unlucky and lose all of your money early on and have nothing left in the game. You cannot then make the investment a large number of times. Even in an efficient market where risk-adjusted returns are equalised this is of no value to Jo Punter. A 12% promised return may be appropriate for the risk but it is a promise and you could lose all of your investment in any one attempt.

The solution is diversification. This is how you effectively repeat the investment a large number of times in the short-term. You invest in a fund that buys all of these types of high yield bonds available. It is unlikely that all will fail at one time. Of course some will and this will reduce the return and you will have to pay fees for the privilege. You can still lose money but you are unlikely to lose it all. You stay in the game. It still begs the question ‘why bother?’ since the more diversified and the longer the time horizon the closer the fund return will get to the risk free rate if markets are efficient. If the fund is no riskier than a deposit then the flow of cash will depress the return to the deposit rate.

Now there is a moral to my story (as always). Why are individual low net worth investors encouraged to invest in individual high yield bonds? By advertising to them (it is on the Guardian website every time I log in lately) it constitutes encouragement. Four years ago I wrote The Co-op, Nationwide, PSB, PIBS and diversification of risk. It was a reaction to individual investors whingeing because they had overly committed to PIBS and PSBs and were about to lose the lot. They invested in individual bonds because of the extraordinary high yields. Unless safeguards are in place greed and denial will see this sorry episode repeated again (and again). Caveat emptor cannot apply because people are typically psychologically incapable of assessing investment risk. They see the return but can never see the risk it seems.

Postscript

This blog may be slightly confusing to those that have heard that equities yield more than cash in the long-run. Remember that cash can be risk-free in nominal terms but not necessarily in real terms. The same idealised economic theory thinks in terms of a unique steady state equilibrium real rate of return to which the economy is always converging. In the limit this is what capital will earn in aggregate. For practical purposes it does seem that real total equity return exceeds that of cash over relatively long periods though equity portfolio value may vary a lot at any point in time. The message is the same. Diversify your portfolio!

Ordinary People

Listening to Vox Pop interviews and politicians alike it seems that people take great pride in being ordinary. It is one of the most common adjectives used in the election narratives. What do they mean by it? If you look it up in a dictionary you will see it means no special distinctive features and commonplace. A bit like grass. Surely, people are not proud of being a blade of grass?

Putting the usage in context one can see that it is intended as code for something more. Ordinary people are actually important people. Indeed they are the most important people. They are the majority. They are the ones clustered one standard deviation from the mean (assuming a normal distribution). In the UK they are typically white, and can trace ancestry back a few generations (though the ancestry may not be British). They earn a bit more or less than the average. They have average qualifications, more or less, and average literacy. They have smoked and maybe still do. They drink. They are overweight and do not do much exercise. They have debt and limited career prospects. Based on statistical distributions this is not a drastically inaccurate picture of ordinary people. Of what exactly are they proud? Being white?

All parties (yes even the Tories) are targeting ordinary people. The implication is that even the Tories have dropped the philosophical bias towards individual responsibility. If you lived a feckless and fast life and never really achieved much, apart from a sense of entitlement, the state will underwrite you. If you were prudent, and careful, well you can look after yourself. If you spent your time at school bullying those that wanted to study because you did not and they were making you look bad, don’t worry the swots will now subsidise you. If you ended up in a dead end manual job, with no security, no qualifications, drank, smoked, and failed to look after yourself, you deserve the best of late life care. The state will take money from those that were prudent, looked after themselves, studied (when you were out boozing), and make sure you are ok. This is what I hear when I hear ordinary people.

Of course, some are just unlucky and others have just been lucky. Some were born into families that had money and good habits. Some were born with better genes. However, some fail despite these advantages. Some succeed despite not having them. Virtue is not normally distributed. Some disabled people live extraordinary lives and some able and privileged people live limited lives. There is no virtue in being ordinary and the focus on such people, whilst electorally expedient, is quite worrying in many ways. It discourages people from striving to overcome because they are entitled to be bailed out by someone else in the end. When the Tories are also adopting this philosophy you know our society has changed and mediocrity and conformity (and whiteness in the UK) trade at a premium.

Memory Lane: pay relativities

One of my enduring memories of the 1960s and 1970s was the endless strikes about pay relativities. One union achieved a pay rise and every other union sought one to maintain ‘pay relativities’. It was as if no one had heard of a labour market and relative pay structures had been set down in stone by a prophet and must be obeyed. Many of the industries that were most insistent were in the public sector. Employment was not subject to market realities in the public sector of this era. They nevertheless spread into the private sector with even more disastrous consequences. It was at root (in my humble opinion) the reason the car industry failed.

Relative price changes is the market’s way of telling you to do more of one thing and less of another. It facilitates a smoother transition. If relative prices are carved in stone then, if demand in one industry declines and in another rises, the signal to shift resources occurs via volume of sales. If pay levels in one industry are relatively high then relative employment levels fall as demand for the product declines. Except that in a unionised public sector this is not so straightforward. Coal, steel, shipbuilding, railways, bus drivers, tube workers, electricity generating staff, gas board staff, telecoms staff teachers, civil servants etc were all in the public sector. Firing people was a major problem because this was another excuse for strike.

The result was that declining industries retained higher than warranted employment levels and productivity increases proved difficult, all subsidised by the taxpayer. The relativities battle ( battles between unions, and between unions and the state) was the basis of the wage-price spiral. Every pay increase raised all wages and inevitably prices. Moreover, fear full of breaking the full employment promise, ensured successive governments validated this process by easy money and easy fiscal policy (no independent Bank of England worried about inflation in those days). High inflation and stagnation (stagflation) was the outcome.

The process was broken by Thatcher by destroying the power of unions to enforce pay relativities. The Miners regarded themselves to be at the top of the working food chain. This is why they were so militant. This is why Thatcher went for them. Once she broke the alpha worker class it all began to fall into place. She followed up by privatising everything that could be run in the private sector in order to ensure that aggressive union behaviour had direct employment prospects (as it had for British Leyland). She also eroded union power. The rest is history.

Today we have a Labour party that wishes to re-nationalise everything it can and increase union power. This does not mean we will return to the bad old days. One obstacle is the independent Bank of England. But independence can be changed by act of parliament. Another would be EU guidelines on budget deficits. Not a problem if we leave the EU is it Jeremy? So if you liked the 1960s and 1970s and want to return, vote Labour.

For the want of a nail…

For the want of a nail…

…the Kingdom was lost

My son informed me that the reintroduction of wolves to Yellowstone National Park had restored the ecosystem. The wolves checked the populations of Moose and Elk and allowed trees to regrow which attracted Beaver, which dammed and stabilised the water course, and so on. It illustrates the interconnectedness of all things organic and how small perturbations can have far-reaching and quite unexpected consequences. In mathematics it is studied as Chaos Theory and in Economics as general equilibrium analysis.

The purpose of econometric models is not to predict the future but to understand the present system. It is an attempt to trace feedback loops and see the consequences of some proposed interventions. Any one that has tried to build such models understands how difficult it is and anyone that has used such models will know how unstable they can be. They are only as good as the specification, data, and estimation technology. They are not very good.

Economics has moved on to incorporate more psychology into analysis, and not before its time. The manner of intervention is now more closely regarded. A simple example is the opt-in/opt-out option. If I want someone to do something I make it automatic with the option to choose not to do so by opting out. Inertia does the rest. Take a look at workplace pensions and union contributions to political parties for examples. Of course, this does not say anything about the general equilibrium consequences of these nuanced interventions. It is customary not to trace too many feedback loops and to assume our interventions are a good thing.

The election has produced a few election pledges from all parties. These are designed to have good soundbite qualities and attract votes. But good soundbites often make poor policy. I am not Political Party animal (or the other kind really). I re-enlisted with the Liberal Democrats solely on the issue of the EU. I am broadly in line with their position on foreign policy and share their stated commitment to civil liberty. Their economic and social policy often makes me shudder. Let us consider this hypothecated 1p income tax to increase funding to the NHS. It is good politics because a survey revealed people would be happy to pay more if they knew for certain it would go towards NHS funding. But let us follow the logic a little further.

The purpose of funding public services through general taxation is to allow the government of the day to set priorities in line with the ideology that it has presented at elections. The Liberal Democrats could simply state that they will prioritize the NHS, aim for a particular public deficit, and set taxation accordingly, perhaps in addition demonizing high earners as the Labour party appears to be doing. Does not sound as appealing as ‘1p dedicated to the NHS’ does it? Does it matter? Let us explore hypothecation.

Let us take this hypothecation further and introduce full hypothecation for all NHS expenditure at a flat rate. What we now have is a state-run health system funded by a health insurance premium irrespective of income or previous conditions. We could introduce some kind of means testing to make the funding less regressive but there is still a health insurance premium to be paid. We have changed the narrative from free at point of use to insurance premium funded.

The introduction of the health insurance premium is a qualitative change that could have far-reaching consequences. At the moment access to the NHS is based on need and payment does not enter the issue. There is no direct connection between taxes and our use of NHS facilities. Once we hypothecate there is a direct connection and it becomes like National Insurance in relation to welfare payments and pensions. Your rights are based on contributions with welfare and pensions. How long before the same situation arises vis-a-vis the NHS? The premium/services framework lends itself much more to a privatisation narrative than the existing NHS free at point of use narrative. Think carefully before you go wolf hunting.

A Journey to Revolution

I was an active Labour Party member from my schoolboy Young Socialist days until a year or so after the New Labour landslide in 1997. I supported Labour throughout this time at some personal cost as I was a banker by profession. I parted company when I realised that in two respects New Labour had changed tack. First, on civil liberties and second, on foreign policy. I joined the Liberal Democrats not because they offered a viable alternative to power but because they paid lip service to the values I held worthwhile. I knew it was only lip service. Politicians are about power. I was not surprised by the willingness to join a coalition and I reasoned they might ameliorate the worst excesses of the Tory party. I think they did.

The 2015 election caused me some problems. The issue that was bothering me was the rise of the right and the vitriol directed at the EU. I had my doubts about Cameron’s strategy of holding a referendum but I could see that this vitriol would grow and become overwhelming under Miliband. The only hope was that a referendum would kill the issue once and for all. It was a slim hope because I knew as well as Farage that racism was the basis of the vitriol and that this was a powerful force. What I most feared came to pass but it might not have.

The surprise event for me was Corbyn. I had noted that there was a demand for a bit more political daylight between the Tories and Labour but assumed the outcome would be a Sadiq Khan type leader e.g. Hilary Benn. This leader would throw his or her weight behind Remain, and just edge it for Remain. I was crestfallen when Corbyn was elected and downright depressed when John Mcdonnell popped up as shadow chancellor. These were Labour men in the Tony Benn mould. Anti-EU, socialist purists. Moreover, whilst working through the democratic parliamentary system, or bourgeois democracy as they might style it, they are, at heart, revolutionaries. I met many in my years in the old Labour party.

They have a vision of a socialist Britain, a final destination as it were. How they achieve it is not, to them, important. Nor do they have a time horizon. The revolutionaries see the chaos and destruction of revolution as collateral damage. The price of achieving the promised land. But revolution does not have to be physically violent. One can engineer a revolution without throwing a molotov cocktail. This may be the strategy of the Corbyn Labour party.

Corbyn has validated a questionable referendum. He has supported Article 50. He has enabled an election in which Labour will lose many seats and the Tories will achieve an overwhelming majority. He is not incompetent. He knows this will be the outcome. He knows exit from the EU will be economically damaging and he knows the damage 5 years of one party rule by the Tories, or CONUK, will inflict upon many of the fools that voted for Brexit and CONUK. Indeed he is banking on it. It will demonstrate to the British people the right does not represent their interests and bourgeois democracy (aka liberalism) cannot protect them. Only a truly socialist state can. He and the revolutionary Labour party will be there to reconstruct Britain, rising like a red phoenix from the economic ashes.

postscript

The day after I published this Corbyn declared he would not step down if Labour lose the election. Well of course not!

Blasphemy Laws

According to Wikipedia the common law offences of blasphemy and blasphemous libel have been abolished in the UK. It seems they remain in place in many countries. There is obvious tension with Article 10 of the Convention for Human Rights, though this article does allow the state discretion. It is odd that religion was ever deemed to be in need of such legal protection let alone continues to be so. Stephen Fry is under police investigation in Ireland for utterances he made with respect to God, albeit not in relation to a specific religion.

The God of the old testament, as I recall, could take care of Himself*. He set the law rather than demanded protection from it. He punished transgressors of His law with floods and such, sparing only those He judged worthy. He was quite ruthless with the Egyptians when their rulers would not let His people go, inflicting all manner of pain by way of persuasion. And when the Pharaoh regretted the decision and the  Egyptian army gave pursuit, He drowned it. It is thus the height irony that humans came to feel that this all-powerful, law giving, judgement giving, punishing God needed protection of human jurisprudence.

Of course, God needs no such protection. It is the religions that profess allegiance to God that have the protection. It is part of the narrative of power that enables religions to prosper and grow. It is testament to the success of religion that the concept of atheist exists. It means without God and it implies that the natural state is to be with God, a theist, much like apnea implies the natural state is to breathe. The mere existence of the word atheist implies being with God is as natural as breathing and to be without God is as fatal as the cessation of breathing. Blasphemy laws reinforce this narrative in a powerful way.

Religion continues to be granted special privilege and respect even by people who no longer have any spiritual conviction. It is deeply embedded in many cultures, quite possibly in all human cultures. You can say what you like about someone’s politics but you cannot criticise their religion or the concept of religion. In many countries it will get you into trouble with the law. One can see why atheists such as Richard Dawkins have become frustrated and quite shrill in declaring their atheism.

There is no reason to stop people practising whatever religion they choose so long as the practise falls within the laws of the land in which it is practised. It is unclear however why such practices should continue to be accorded special protection under the law. Article 10 of the Human Rights convention does not allow prohibition of speech simply because it is offensive. Yet blasphemy laws allow exactly this. The laws allow religions and their representatives to declare any criticism of their beliefs offensive and subject to force of law. Why are religious beliefs above criticism by those that do not hold the beliefs? Surely those that hold the beliefs will not be swayed and the almighty God of the old testament needs no protection. Of what are people of faith so afraid?

  • I use the masculine because this is what appears in my copy of the old testament.

London and the Car

There appears to be a fundamental change taking place in London with respect to cars. Young Londoners do not drive. Indeed young Londoners appear not to be learning to drive. The reason is partly economics but it also reflects the increasingly hostile environment that London offers drivers. Parking charges, congestion charges, large fines for infringements. It is easy to infringe with yellow boxes and bus lanes, and complex signs everywhere. It will get worse as pollution concerns enable the Mayor to turn the screw. This is the push element.

There is also a pull element. Public transport in London is improving. There has been substantial investment in London public transport. Crossrail is coming to fruition. New stock on old underground lines. Night tubes! There are plenty of buses on plenty of routes not covered by rail (though the experience of using buses does not seem to have improved much since the Routemaster days). If you travel everywhere by public transport then you can cap weekly and monthly costs.

The shopping experience has also changed with grocery delivery, parcel delivery, and online shopping being much easier and getting better all the time. For the young living in not the best accommodation with cramped conditions and limited storage, a large weekly shop at a supermarket with parking no longer makes sense. You have no car and nowhere to put a large weekly shop. In any case your lifestyle says who knows when you will next be home to cook. Frequent deliveries of small amounts of food is impractical and expensive, as is take-away. What you need is a small convenience store near the tube station or bus stop that keeps long hours and always has some good fresh food in stock.

This seems to be the conclusion of one supermarket, Sainsbury’s. The strategy is to expand the small local stores. The constraint is suitable sites so the strategy is now to seek franchise opportunities. Franchising is always tricky as it is hard to maintain a consistent standard and variability can undermine the brand. The strategy has important implications for the high street.

There has been something of a crisis on the high street as traditional outlets have given way to estate agents, betting shops, charity shops, and coffee chains. The progress of the millennial and their aversion to cars may halt and reverse this process. The high street becomes important when you need to be in walking distance of outlets. As the millennials come to dominate the London population, and old timers like me die off, London may revert to what it once was, a collection of local communities, only now much better connected by public transport. It sounds interesting and rather fun. It sounds cleaner and healthier. The future is bright, the future’s London…

Index-Linked Savings Certificates

So what was the highest risk free return one could have earned on a sterling asset last year? Most people would point to a long maturity gilt-edged bond. Gilt yields have fallen substantially year to date and this provides a nice risk-free, and tax-free, capital gain, as well as a taxable, risk-free, coupon, Except that gilts are not totally risk-free. They are free of credit risk but, by definition, not free of interest rate risk. What if yields had risen?

The answer is of course Index-linked Savings Certificates. These have returned a minimum* of 3.23%, which is the rise in the RPI index year to date. This is free of credit and interest rate risk. It is also tax-free. If you managed to do better than this then do tell. The interesting thing is that the minimum is also a positive real return, which is odd for the index component. The reason is the RPI is now discredited as an inflation index but, as you can see, not disused. The official inflation index is CPI which rose by 2.3% over the same period. So the index component of your ILSC earned a real, risk-free, tax-free, return of almost 1%. Nice!

The RPI typically comes in above the CPI so this situation is unlikely to change any time soon. So where do you get your hands on these certificates? You cannot. They have been discontinued but those holding when they were discontinued have been allowed to renew at each anniversary. The interest rate above RPI has come down to 0.05% but the fact that they are index-linked, and in particular index-linked to the RPI, makes them invaluable. If you have some keep renewing. You cannot do better for this risk class. In fact this is the only product in this risk class.

The question that remains to be asked (there is always a point to my blogs) is why do the government allow renewal at maturity? They are gifting an arbitrary group of savers with the opportunity to accrue at a rate not available elsewhere on any comparable instrument. Indeed the next best return is not even close. The next best product offered by NS&I for new savers is the Investment Guaranteed Growth Bond which offers a taxable 2.2% for a fixed term of three years. Unfortunately, the maximum investment per person is £3000 which is considerably less than the ILSC. There appear to be no private IL savings accounts available to new customers and rates on private sector 3 year fixed savings accounts are below 2% at the time of writing. It is an anomaly for which the lucky few can be grateful but it is an odd situation.

  • The amount over RPI paid depends on when you renewed. The last renewal was at 0.05% over RPI.
%d bloggers like this: