Government pensioner bonds launch

As confirmed on 12th December 2014 by the Chancellor, the Bonds – which are formally known as 65+ Guaranteed Growth Bonds - will offer 2.8% gross/AER interest over a one-year term and 4% gross/AER interest over a three-year term.

Within minutes of the launch, the NS&I website crashed due to an influx of visitors. The NS&I press office said they were working to resolve the issue and that they would "like to reassure savers that there is no need to rush to invest".

The issue of these Bonds has been made at the Chancellor’s request, and has been designed to support older savers who rely on their savings during their retirement.

Up to £10 billion has been made available to cover both the one and three year terms, enabling sales of the Bonds to continue for an expected period of months rather than weeks.

The bonds have an investment limit of £10,000 per bond per person, and are estimated to help around 1 million pensioners. Investors can hold bonds jointly, allowing a couple to hold a maximum of £40,000.

Chancellor of the Exchequer, George Osborne said:

“A key part of our long term economic plan is to support savers and boost hardworking people’s financial security at all stages of life.

“That’s why I am delighted to announce that the government’s new 65 plus bonds are now on sale with the best interest rates in the market. These bonds will give hundreds of thousands of older savers the certainty and comfort of a good return over the life of their investment.”

Jane Platt, Chief Executive, NS&I, said:

“We’re really pleased to be starting the New Year by offering the 65+ Bonds to support older savers.

“We expect these Bonds to be on sale for months not weeks and would like to reassure savers that there is no need to rush to invest.  We would also encourage savers to apply online. This should be the quickest and easiest way to invest and will provide immediate assurance that an application has been received.”

Calum Bennie, savings expert at Scottish Friendly, said:

“It’s all very well the NS&I telling people not to ‘rush’ to get the new Government bonds, but with superior rates to anything else that you will find on cash deposits on the high street, you don’t have time to sit around and twiddle your thumbs. By 09:00 this morning the website selling the bonds had already reported problems under the weight of demand.

“There is £10bn set aside for this tranche of bonds, so we are not likely to see it sell out in days. However, there is only a very slim chance that they will still be available by March. For those savers that are unable to get their hands on a bond before they disappear, there are still a number of options out there, including tax-free investment ISAs.

“Whether or not successful in getting one of these Government bonds, savers should still be reviewing their current savings strategy in the run up to the end of the tax year. People should question their current strategy for saving and if they are getting a low rate, then it’s time for them to make a change.
“Anyone thinking of taking out a pensioner bond by cashing in an existing ISA needs to bear in mind that will then lose the tax-free status of their savings."