Pensioner Bond - 65 Plus Bond
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Ifts
Posts: 1,952 Forumite
Pensioners buying the one year bond will have a 12 month wait before they see any interest and for the 3 year deal will have to wait until 2018 (no monthly income option).
Interest will be paid out at the end of the term only after 20 per cent income tax has been deducted, meaning non-taxpayers will have to then claim the tax back from HM Revenue & Customs. They cannot fill in form R85 so interest is not docked, as they can with bank and building society bonds.
http://www.thisismoney.co.uk/money/saving/article-2802127/another-hammer-blow-pensioners-chancellor-promised-special-bond-boost-income-older-savers-s-catch.html
Interest will be paid out at the end of the term only after 20 per cent income tax has been deducted, meaning non-taxpayers will have to then claim the tax back from HM Revenue & Customs. They cannot fill in form R85 so interest is not docked, as they can with bank and building society bonds.
http://www.thisismoney.co.uk/money/saving/article-2802127/another-hammer-blow-pensioners-chancellor-promised-special-bond-boost-income-older-savers-s-catch.html
Never let the perfume of the premium overpower the odour of the risk
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Comments
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If the interest rate is high enough you can hardly complain at what sound to be cost-cutting measures.Free the dunston one next time too.0
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Anyone who can afford to put £10K away for 1 or 3 years will probably not give a hoot about when the interest is credited. What matters to them is how much the AER % is.
But even if a monthly income of £20-£25 (at a guess) were critical to them, that income doesn't have to come from the bond. They could, for instance, put some £250-£300 into an interest paying current account instead of into the bond, and get more interest on that £200-£300 than the bond will pay.
Most 65 year olds with £10K spare will most likely also have a lot of time to find better offers on the internet and in the papers, and they will possess a lot more money savveyness than that Daily Mail journo will ever have. So they will only use the pensioner bond if it beats other offers, or if they have maxed all better offers.
We are still laughing here about the language in that article..."another hammer blow", "in a further blow", "devastating setback" - can't really take anyone serious who manages to put such a negative slant on an offer that can't be brilliant (due to the times we live in) but will be available for a select few who can benefit from it.
For the facts about these pensioner bonds, see http://www.nsandi.com/savings-65plus?ccd=NAJBAA0 -
Not having a monthly income from these bonds is not really a problem (~£55 per month if you take out both the 1 & 3 year bond)) as you just put some money aside in another account.
Interest being paid out at the end of the term only after 20 per cent income tax has been deducted meaning non-taxpayers will have to then claim it back - how many will not bother to claim it back or will not know how to.Never let the perfume of the premium overpower the odour of the risk0 -
You are making a big assumption that people can have both, the 1 and the 3 year version, but you may be right, that might be possible.Interest being paid out at the end of the term only after 20 per cent income tax has been deducted meaning non-taxpayers will have to then claim it back - how many will not bother to claim it back or will not know how to.
How many of those who can afford these bonds will be eligible for gross tax? I suspect very, very few.
I concede there might be the occasional person who will not make the best of these bonds for themselves. But most 65+ year olds nowadays aren't uninformed or incapable of informing themselves. Most will also know that there is more to news than the Daily Mail.0 -
You are making a big assumption that people can have both, the 1 and the 3 year version, but you may be right, that might be possible.
Full details of the Bonds will be available when they go on sale in January but from the facts about these pensioner bonds that you supplied the link for above:
How much can I invest?- Minimum for each investment £500
- Maximum per person per Issue of each term £10,000
Never let the perfume of the premium overpower the odour of the risk0 -
So are they only available to blokes of the opposite sex, or would calling them "old git bonds" detract from their appeal..? (I'm a nearly old git btw...).0
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How many of those who can afford these bonds will be eligible for gross tax? I suspect very, very few.
With a minimum of just £500, I think any pensioners who have actually tried to save can afford them.
With up to £10k normal income, plus £5k savings income, at zero rate, plus investments in ISAs, I think a fair number of those pensioners won't be paying tax. I know I won't.Eco Miser
Saving money for well over half a century0 -
DOH, don't know why I assumed they would all put the max in. Of course people could put a lot less into these bonds, and then there could well be some who would be entitled to gross interest. I do see that it might be a bit inconvenient but am sure that they will be keen enough on the extra few quid and will have enough time on their hands to claim the money back.0
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