Pensioner Bond rates halved!
NS&I have announced that the Pensioner Bonds introduced last year will not be renewed, despite the clear popularity of the product. These bonds were designed to encourage savings by the over 65s and offered high returns on cash savings compared with the market place, over either one or three years.
However, the one-year product will see a rate cut of 50% as early as January. The rate will fall from 2.8% down to 1.45%, which is lower than could be achieved with a cash NISA at your local high street bank! The three-year bond will return only 1.9% instead of the 4% they were originally offered at. This doesn’t seem nearly enough reward for locking your money away for three years!
WARNING – it has been suggested that if you do nothing, your bonds will be automatically reinvested at the lower rate on your one-year anniversary! It is clear that money invested in these bonds will have to be moved to an alternative provider to get the best rates available. If you are affected and need some advice on how best to invest your proceeds then please get in touch.