High yield bonds boost for over-65s
Couples aged 65 and over will be able to save up to £40,000 at market-beating interest rates under plans for pensioner bonds confirmed by Chancellor George Osborne yesterday.
The bonds are designed to help older people earn the best interest available on the savings they rely upon after more than five years of being hammered by record low Bank of England rates at 0.5%.
Mr Osborne confirmed plans for National Savings and Investments (NS&I) to issue one-year bonds paying annual interest of 2.8% and three-year bonds paying 4%, from January.
These rates are significantly higher than any others currently offered in the market, the Treasury said. There will be a minimum investment of £500 per bond and a maximum of £10,000 per bond per person while investors can also hold bonds jointly though these will also count towards an individuals' limits.
It means a couple could hold £40,000 together, assuming each partner holding £10,000 in a one-year bond and £10,000 in a three-year bond. The Treasury said the bonds would provide a good return for those who have saved all their lives and now rely on their savings in retirement.