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The new NS&I pensioner bonds: Reaction

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The Pensioner Bonds from NS&I, announced by the Chancellor of the Exchequer in the March 2014 Budget, have been launched today.

Experts give their reaction.

Andy James, head of retirement planning, Towry:

“If you do get the chance to invest in these new bonds, despite the current issues with the NS&I website, it is well worth doing. The returns are better than anything that any bank is offering at the moment. The new pensioner bonds are Government-backed (so therefore very safe) investments, with an attractive interest rate on the bonds of 2.8% gross/AER (1-year Bond) and 4% gross/AER (3-year bond). There are only £10bn worth of these bonds available – and individuals are only able to invest between £500-£10,000. So you will have to get in early to have a realistic chance of investing.”

Susan Hannums, Director at Independent Savings Advice site

“The long awaited, highly competitive pensioner bonds are finally available. The rates continue to offer excellent value, currently paying 53% more than the average of the top 5 one year, and 62% more than the average of the top 5 three year fixed rates.

“Those able to take advantage should. The bonds are head and shoulders above the nearest competition and even allow access to the funds within the term. In the current record low interest rate environment we believe these bonds will be extremely popular and have set our stop watch to see just how long they will last.

“It’s interesting that NS&I believe that they may be available for months, rather than weeks, as given the level of interest we’ve received from our customers, we believe it could even be days.

“Our message to any savers wishing to take advantage is to act now to secure these fantastic rates, as it could be a case of blink and you’ll miss them. For those that miss out, there are alternatives such as high interest paying current accounts that can help fill the gap and with rates of up to 5% available, all will not be lost if you’re unable to snap them up.”

Calum Bennie, savings expert at Scottish Friendly

“It’s all very well the NS&I telling people not to ‘rush’ to get the new Government bonds, but with superior rates to anything else that you will find on cash deposits on the high street, you don’t have time to sit around and twiddle your thumbs. By 09:00 this morning [Thursday morning] the website selling the bonds had already reported problems under the weight of demand.

“There is £10bn set aside for this tranche of bonds, so we are not likely to see it sell out in days. However, there is only a very slim chance that they will still be available by March. For those savers that are unable to get their hands on a bond before they disappear, there are still a number of options out there, including tax-free investment ISAs.

“Whether or not successful in getting one of these Government bonds, savers should still be reviewing their current savings strategy in the run up to the end of the tax year. People should question their current strategy for saving and if they are getting a low rate, then it’s time for them to make a change.

“Anyone thinking of taking out a pensioner bond by cashing in an existing ISA needs to bear in mind that will then lose the tax-free status of their savings.”

Contact:, Tel: 0500 500 000.

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