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NS&I pensioner bond savers see rate slashed

The rate offered on the one-year pensioner bond will be cut from 2.8% to 1.45%.

 
NS&I pensioner bond savers see rate slashed

Older savers who invested their money in National Savings & Investments (NS&I) pensioner bonds will see their rate of interest halved within weeks.

Pensioners who invested £13 billion of their cash in the one-year 65+ guaranteed growth bonds have 30 days to move their money to a new account as their rate will be cut from 2.8% to 1.45%.

The cut comes as the bonds, which were issued between January and May this year, start maturing in January 2016. The government has declined to extend the scheme, stating it was a ‘special issue designed to support older savers’.

Individuals could save up to £10,000 in pensioner bonds meaning up to £135 a year in pre-tax interest could be lost.

Savers who do not make a decision on what they want to do with their money will automatically be transferred into another fixed rate bond paying 1.45%.

Rachel Springall of Moneyfacts.co.uk said savers needed to act if they wanted to move their money as ‘NS&I have taken away the option to ring up and move your money’ and all switches have to be done online or by post.

‘NS&I are automatically enrolling people into the 1.45% bond if they do not make a decision and then you will be fixed in for a year,’ she said. ‘You can move the money or have it paid into your bank account.’

She urged savers to make a decision quickly due to postal delays because of the Christmas rush.

While Springall said the 1.45% bond was not a bad deal, there were better places to put your cash. United Trust bank is offering 2.15% on its online-only one year bond and First Save is offering 2.12%, also online only.

4 comments so far. Why not have your say?

Byerley

Dec 16, 2015 at 18:23

Your headline is misleading. The rate on the existing bonds remains unchanged. It is just that no new bonds will be available

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Ian Phillips

Dec 16, 2015 at 18:29

I agree.......just another headline grabbing ill- informed article!!

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Jayanti Gandhi

Dec 17, 2015 at 17:44

One yr fix rate bond,NS & I can not change the rate until maturity. I believe it is only for those who have maturity coming in January need to act on maturity. The article is VERY BADLY written & is inaccurate.

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Chris Phillips

Dec 19, 2015 at 09:36

Strictly speaking, the headline is not inaccurate, but the article should have gone onto say that the rate reduction does not affect holders of the three-year bonds.

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