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Pensioner bonds safe as NS&I cuts Guaranteed rates

Pensioner bonds safe as NS&I cuts Guaranteed rates

Category: Savings

NS&I announced today that it is cutting the rate on its three-year Guaranteed Growth and Guaranteed Income Bonds by 0.25%, effective immediately. Luckily for those coming to the end of their Pensioner Bond term, however, those who roll over will be spared the rate cut. But is it your best option?

Three-year fixed rates

National Savings and Investments (NS&I) are backed by the Government, so while savers can feel extra secure, NS&I also have to achieve a certain balance in their finances. That's why, given the popularity of all their accounts, they've now decided to reduce the rate on their three-year Guaranteed Growth Bond from 2.20% to 1.95% and their Guaranteed Income Bond from 2.15% gross to 1.90% gross (1.92% AER).

"Whilst it's disappointing to see NS&I cutting these rates, savers shouldn't be too disheartened as they can get a better deal elsewhere," Rachel Springall, finance expert at, commented. "Taking a few moments to scan our own Best Buy tables shows Vanquis Bank paying 2.30% from as little as £1,000, which sits at the top of the market, but savers will need to apply online."

The three-year fixed bond Best Buys further show that a lot of rates will now outperform NS&I, which means there should be plenty of alternatives to choose from for those looking to get a great rate. And with £85,000 currently protected per banking group in any UK savings account, thanks to the Financial Services Compensation Scheme, you shouldn't be afraid to look elsewhere.

Pensioners safe, but sound?

This also goes for pensioners. According to NS&I's statement, "customers who have maturing three-year Guaranteed Growth Bonds and three-year 65+ Guaranteed Growth Bonds will be able to roll over their investment for another three-year term at a rate of 2.20% gross/AER – as stated in their maturity pack."

However, that doesn't mean those with maturing bonds should simply roll their funds over – looking around and doing your research before deciding what to do with your money is always a good idea. You might even want to look at a fixed rate bond with a different term, or invest your money somewhere else altogether.

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 Any products featured may be withdrawn by their provider or changed at any time.