The government’s Pensioner Bonds will remain on sale for another 3 months, the Chancellor George Osborne has announced.
Following the unexpected demand, the government has chosen to keep the over-65 bonds on sale until 15 May 2015. The Treasury originally expected to sell £10bn of bonds but now estimates that £15bn will have been issued to more than 1 million people by May.
The government-backed bonds have been one of the most popular financial products in history. £7.5bn worth of Pensioner Bonds have been sold to more than 610,000 savers since they were launched on 15 January.
The products offer market-leading rates of return:
- the 1-year bond pays 2.8% interest before-tax
- the 3-year bond pays 4% each year before tax.
Individuals are able to invest between £500 and £10,000 in each bond. They are intended to be held until maturity but investors are able to sell them with a penalty amounting to 90 days’ interest.
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.”