Some welcome news from the Government; Pensioner bonds are to be available until the general election. The chancellor told the BBC he was extending the deadline for over 65s to apply to May since the idea had proved “enormously popular and successful”.
Many hopeful investors have given up trying to buy the bonds as all the National Saving’s phone lines were jammed and the web site crashed. There is now plenty of time to lock into competitive rates of interest for either one or three years.
One point worth making; each investor can buy both the one and three year issue, allowing a £20,000 investment in total.
Please remember, the interest paid is taxable and there is no option top receive an income – all the interest rolls up in the bond until maturity.
As we mentioned in our previous news post it is possible to achieve a higher one- year return by applying for the three year bond and encashing early. After the early withdrawal penalties the interest rate is an effective 3.0%.
