Dec 12

Are you in the know about the new pensioner bonds?

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From January, savings bonds for over 65s, titled ‘pensioner bonds’, will become available.

The rates, confirmed today, are the main draw – you could be earning up to 4% on your money.


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rising-interest-ratesBecause the interest rates are considerably better than other bonds and backed by the government (and therefore safe), pensioner bonds are expected to be extremely popular and it is likely that demand will be higher than supply.

There are two options;

  • a one year bond which pays 2.8%
  • and a three year bond which pays 4% per annum for three years.

The current leading rates available for other bonds are 1.85% for a one year bond and 2.5% for a three year bond, so you can see why pensioner bonds are going to be popular.



pensionThe minimum investment is £500 and there is a maximum of £10,000 per person, per bond and they will be sold online, by post and by phone.

There are some drawbacks however, the biggest being that the bonds don’t pay monthly interest so you can’t take a monthly income from them. You’ll have to wait the whole course of the bond (one or three years) and then receive the full amount.

The interest on these bonds is also taxable, which means if you’re a non-tax payer you’ll have to claim it back from HMRC.



Nevertheless the interest rates do speak for themselves and are definitely something you should consider.

The bonds will be sold on a first-come-first-served basis so it’s important to keep your eye on the NS&I website so you know exactly when in January you’ll be able to get one.



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