Pensioner Bond Extension

Pensioner Bond Extension.

The Chancellor, George Osborne, has confirmed that the government is to extend the availability of the National savings and investments pensioner bond.

The current issue started in January this year paying 2.8% for a one-year bond and 4% per annum for a three-year bond with a maximum investment of £10,000.

The government initially set a maximum investment take of £10 billion and this is now to be extended to £15 billion.

The Chancellor also confirmed that the deadline for applying for a pensioner bond will be extended to 15 May 2015. To date over 500,000 people have signed up to the bond and a further 250,000 people are expected to save in pensioner bonds before the deadline in May.

Comment

Given that the Bank of England is rumoured to be considering cutting interest rates in the United Kingdom to stimulate the economy, we suggest this will create additional demand for the pensioner bond and even at 2.8% for a one-year bond given that it has a security guarantee backed by the British government we suggest this is a competitive interest rate that will be taken up by many pensioners.

Link to Pension Bonds:  http://www.nsandi.com/65-guaranteed-growth-bonds