What is a pensioner bond you ask?
A pensioner bond or “65+ Guaranteed Growth Bond” is a a fixed-rate savings account that can be held only by those aged 65 and over and offer a guaranteed rate for a set time and your cash is locked away for that period.
So, January 15th 2015 saw National Savings & Investments (NS&I), launch £10bn worth of UK pensioner bonds for one or three years, especially for those who are 65 years and over.
The one year bond yields 2.8 per cent gross, at least a percentage point higher than the market. The three year bond gives 4 per cent gross.
You can put up to £10,000 into each bond. There are no tax breaks on these bonds, and tax is deducted before interest is paid, so non taxpayers will have to claim the tax back from HMRC.
The pensioner bonds are a lock away investment, they do not provide a monthly income for savings which older people desperately need, but yippee, they are tremendous good news and should be grabbed to the full by everyone aged 65 plus.
At last, a better rate of interest for the pensioner. There are 11 million people aged 65 years and above, and 14.7m aged 60 plus. There are three million people who are 80+.
Have you been trying to buy these pensioner bonds? When my husband tried the NS&I bond telephone number, 0500 500 000, it was permanently engaged. He sent an email, not too hopeful of anyone getting back anytime soon, but amazingly, NS&I customer services emailed back with an application form link at 8pm on January 15th.
Let’s hope that this bond issue isn’t like a successful stock market IPO. The Royal Mail share launch in 2013 was so oversubscribed that it was a waste of time putting in for the launch.
Of course, an added appeal of the NS&I bonds is the risk is nil, being backed by the government.
An NS&I spokes person was reassuring when I called, the bonds will be available for “months” not weeks, and it’s intimated that the £10 billion earmarked should be sufficient to meet demand.
Demand is high, not surprisingly given the massive percentage of those aged 65 who have been waiting for an offer like this for their savings ever since interest rates disappeared on the back of the 2008 banking crisis. Thank goodness for elections.
NS&I suggests to would-be buyers of bonds to wait a few days while the gadarene rush drops away and the telephone lines are less clogged.
You can seek out the online application form here.
Don’t be laid back, get on with it. Crumbs, the number of interest rate offerings from building societies and banks that have closed by the time I get around to applying.
If you have any NS&I products already and haven’t registered online, then register straight away to get the online updates via email. If the £10bn threatens to be gobbled up in a few weeks ensure you are the one at the head of the queue.
Put the money you want to invest in a bond in place now. Decide, if you and your spouse are both over 65, whether to put the bond in joint names for flexibility. As a joint name you can still only invest a maximum of £10,000 per bond type, i.e. the one year or the three years, i.e. £20,000 in all.
Please Note: Only one release of the bonds has been announced, and that’s the one which launched on 15 January 2015 and closed on 15 May 2015. NS&I said there is no update at the moment at all on whether Pensioner Bonds will come back.
BEWARE- Pensioner Bonds have now CLOSED, so any claim to still offer them is a scam. (Oct 2015)
Help is at hand – new investment and savings advice from Saga
Saga and Tilney Bestinvest are setting up an investment advice and financial planning service for the over 50s, to be launched later this year.
This is a good idea. Too many people are doubtful about paying for savings advice from the high street IFA who may, or may not, make good decisions and be gone tomorrow, for all we know.
One very well known company (Saga), plus two established City names are joining forces, keen to help anyone who needs financial advice. This could help quite a few who know they should be more organised about their investments but don’t know where to turn, especially when it comes to finding income for their savings.
It could be useful to be able to call on Saga Tilney Bestinvest to check that one is vaguely doing the sensible thing. After all, there are so many variables to grapple with, like the stock market, interest rates, and the world economy, so a solid enterprise we have heard of could be reassuring.
Of course what will be really interesting is what the partnership plans to charge for its skills, initially targeting Saga’s awesome 10.6 million over 50s database. The partnership says the service will be “great value for money.” Prices may turn out to be like Saga’s insurance – not cheap but you are buying a tried and tested brand.
TV – cheap as chips
Did you know that the Dutch aged 50+ are watching twice as much TV as Dutch teenagers?
The Dutch who are over-50 watch the most television – an average of 4hrs 29 minutes a day, up 15 minutes on five years ago.
The average viewing time per day in Holland was three hours 20 minutes last year, according to the Amsterdam-based TV analysis foundation, Kijkonderzoek.
However, it appears there is a clear age divide, with the over-34s watching more television and younger people finding other sources of screen entertainment, it said.
It is silly to pretend we Brits are not watching the TV plenty, and more so as we get older and less busy. Not all of us can afford lots of foreign travel to while away our latter years.
TV is cheap as chips and amazing value. Think how dull our ancestors’ old age was without the radio and TV? Sitting in the corner and mentoring the younger generation.
As you get older with more time spent in your comfort zone and go out less at night to party, you can’t eat, read, do puzzles or seduko, build the Taj Mahal in matchsticks, shop, child care, or be sociably drinking in pubs – all the time.
Thank goodness for the telly.