The savings products for over-65s known as pensioner bonds have gone on sale, National Savings & Investments (NS&I) has announced.
The government-backed investments, announced during the March 2014 Budget, are promising market-leading rates to investors aged over 65.
There are 2 types bond on sale:
- the 1-year bond that will pay annual interest of 2.8% before tax
- the 3-year bond that will pay 4% a year before tax.
NS&I intends for the bonds to be held for the whole term, although investors can sell them with a penalty amounting to 90 days’ interest.
Each person can invest a minimum of £500 and a maximum of £10,000.
NS&I has made £10 billion available to cover the 1-year and 3-year terms, which are both expected to be popular. The government has estimated that around 1 million retirees will invest in pensioner bonds.
Chancellor of the Exchequer, George Osborne said the 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.”