National Savings & Investments Pensioner Bonds - COMING SOON
As regular readers of our newsletter will know, the new National Savings & Investments 65 Plus Bonds, dubbed Pensioner Bonds, are due to be launched this month.
The exact date of launch is a closely guarded secret (or so it seems) with NS&I waiting until the bonds go on sale to inform savers they are available and release the full details.
Those who are interested in taking full advantage might want to act fast as demand is expected to be high, not least as the rates on offer are head and shoulders above comparable accounts in the market.
We will of course let you know when these bonds become available but you may also wish to sign up on the NS&I website to receive the information as soon as it happens.
In the meantime here's a handy guide of what's on offer, our top tips and how to apply.
Am I eligible?
Available to over 65s only
What are the terms?
1 & 3 Year Terms
What are the interest rates?
1 Year Bond – 2.80% gross/AER *
3 Year Bond – 4.00% gross/AER *
How much can you invest?
Maximum £10,000 per bond (therefore you could invest £20,000 per person or £40,000 per couple)
How is the interest paid?
Interest is fixed for the term and added each anniversary, however no interest is paid out until maturity, even on the three year bond
Can I take monthly income?
Can I access the bonds within the term?
Access within the term is permitted subject to a penalty equivalent to 90 days loss of interest
How are they taxed?
The bonds are taxable and paid net of basic rate tax
It’s worth noting that even though the interest is not paid until maturity, on the three year bond, higher and additional rate taxpayers will need to declare the income on their self-assessment tax return each year, even though the interest would not be paid until the end of the term
I’m a non-tax payer, how can I claim the tax back?
Non tax payers must claim back the tax from HMRC. Savers are unable to complete an R85 form for interest to be paid gross
How can I apply?
Online, phone or post
Our Tips: To beat the possible rush it may be best to apply online or over the phone, as postal applications will take a little longer.
As access is permitted with 90 days loss of interest, savers can still earn more interest in the 3 year bond even if they choose to close the account after the first year.
* AER (Annual Equivalent Rate) is a notional rate that illustrates what the annual rate of interest would be if the interest was compounded each time it was paid. Where interest is paid annually, the quoted rate and AER are the same.