Top ten facts about Pensioner Bonds
Have you heard of Pensioner Bonds? No, they’re nothing do to with Roger Moore or Sean Connery – it’s actually a new form of savings account.
Rather than saving with a bank, you’re putting your money into a government protected scheme. In return you’ll get a guaranteed amount of interest. These new Pensioner Bonds will be available from National Savings & Investments (NS&I), and the interest rates could make them a better option than standard savings accounts or even ISAs.
Here are 10 things you need to know about the Pensioner Bonds.
1) Anyone aged 65 or over will be able to get one for their savings.
2) They’ll be available from January, though the exact date isn’t known yet.
3) They have fixed terms of one year or three years.
4) Interest rates are 2.8% for the one year bond and 4% for the three year bond.
5) Interest will be paid at the end of the bond’s term.
6) You will have to pay tax on the interest you earn.
7) If you withdraw money early, you will pay a 90 day penalty on the interest.
8) Minimum investment will be £500 in each bond and the maximum will be £10,000.
9) You can have one of each bond. So that’s a maximum of £20,000 per person.
10) They’re only available for limited time – until £10 billion worth have been sold.
This article is provided by the Money Advice Service.
