After months of anticipation, the Pensioner Bond has finally been launched. On sale as of this morning, these new accounts from NS&I – officially known as the 1 and 3 Year 65+ Guaranteed Growth Bonds – will offer pensioners the chance to secure real returns from their savings, something that the Chancellor was committed to in his last Budget. So, are you ready to enter the buying frenzy?
If you haven't heard much about these accounts yet, you may be wondering what the fuss is all about. You can find out more about them in our Pensioner Bond FAQs, but in a nutshell, it's all about the rates. Both bonds are truly market-leading to give pensioners who rely on their savings the chance to get real returns, and they really are worth shouting about.
The one-year version of the bond pays 2.8% per year while the three-year equivalent pays 4%, and when you compare that to the average – Moneyfacts' figures show that the average one-year account (excluding the Pensioner Bond) offers just 1.43%, while the average three-year fixed bond pays 2.03% – you'll soon see why everyone's clamouring to get their hands on one.
However, despite the hype surrounding the bonds, the actual launch took the market by surprise. There was no advance warning – it was widely known that they'd be available sometime in January, but the exact date wasn't revealed. That means some pensioners could be caught off-guard, as Sylvia Waycot, editor at Moneyfacts.co.uk, comments:
"Many of the people eligible for the newly launched 65+ Guaranteed Growth Bonds must be feeling pretty miffed by the quietness of the actual launch, which is in stark contrast to the very loud original announcement made by Chancellor George Osborne. While the bond is clearly marketed for any pensioner quick enough to apply, only those who signed up to the NS&I newsletter will have received the heads-up about its sneaky launch."
Nonetheless, the day that pensioners everywhere have been waiting for has finally arrived, so you'll need to act fast if you want to secure the returns on offer. Up to £10bn has been made available to cover the one and three-year terms, and given that each bond has a maximum investment allowance of £10,000, that's potentially only 1m bonds to go round.
NS&I say that the £10bn issue will mean that sales of the bonds will continue for months rather than weeks, but not everyone's convinced. Demand is expected to be incredibly high – at the time of writing, NS&I's website is already struggling to cope with the traffic – so you may not want to leave it that long if you want to maximise your chances of getting your hands on one of these deals.
The bonds can be applied for online, by post and by phone, but really, heading online will be your best bet. Those who apply by post will have to contend with the possibility of postal delays, and even the fear that the bonds could be fully subscribed by the time their application is received, so don't run the risk.
"This bond is going to be gone in days if not sooner," added Ms Waycot. "If you want the chance to get hold of one, then waste no time in applying. Disregard any notion of postal applications and don't get stuck in a long phone queue as it really is a case of quickest gets the deal. My advice is to apply online."
Find out more about the Pensioner Bond
Don't qualify? Check out alternative savings accounts
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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