Pensioner Bonds on Sale

The ShareSoc blog provides news and informal commentary from directors, members and other contributors. Entries reflect the personal views of the authors, which do not necessarily reflect ShareSoc’s formal position. Contributors may hold shares in the companies mentioned. Nothing in this blog should be viewed as financial advice. You may submit comments on blog posts, but ShareSoc reserves the right to remove or edit inappropriate or defamatory submissions.

The new bonds available from National Savings & Investments (NS&I) went on sale today (15/1/2015). Technically called “65+ Guaranteed Growth Bonds”, they have been dubbed “Pensioner Bonds” by the media. You need to be 65 years of age or older to purchase these bonds but they do offer a very attractive interest rate in comparison with current bank deposit rates. Interest is either 2.8% per annum for a one year bond, or 4% for a three year bond. The maximum that can be invested in each of those two types of bond is £10,000 per person (i.e. £20,000 in total).

The interest is not paid out, but accumulates within the bond until maturity. The interest is taxable and tax is deducted before payment at the standard rate, but can be recouped by non-taxpayers. Those who pay higher rate tax would pay additional tax. The bonds incur a penalty if cashed in early so these are not for people who may need cash urgently.

It is expected that there will be high demand for these bonds so anyone interested should apply as soon as possible. Although doing so on the first day they were available has proved to be very difficult on-line. The NS&I web site seems unable to cope with the demand.

Roger Lawson

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.