Sale of pensioner bonds extended
The Chancellor, George Osborne has announced that the cap on the amount of pensioner bonds that the Treasury will issue of £10bn has been lifted. Instead, the bonds will now remain on sale until 15 May 2015 with an unlimited amount available until then.
There are two bonds available, a one-year bond paying 2.8% and three-year bond paying 4%. The bonds are taxable, but eligible savers can receive the interest tax-free. Pensioners will be allowed to invest a maximum of £10,000 in each bond, meaning that a couple both aged over 65 can invest a total of £40,000.
The bonds which are being marketed by the National Savings and Investments (NS&I), an Executive Agency of the Chancellor of the Exchequer, were first made available on 15 January 2015 and the demand has been extremely high.
In the first two days the bonds were available over £1.2 billion in bonds was sold to over 110,000 savers aged 65 or over with many savers reporting problems using the NS&I website or getting through on the phone. The latest figures revealed by the Chancellor show that over 600,000 savers have now purchased bonds totalling over £7.5 billion.
The Chancellor George Osborne said:
‘I want to ensure as many older savers as possible can take advantage of these market-leading bonds, which is why I’m confirming today that potential savers will have months to invest in these hugely popular products, if they wish.’
The main drawback with the pensioner bonds is that the money is tied up for the length of the bond (either one or three years).