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Budget 2014: Budget 2014: Pensioner Bonds coming for over-65s

in Over 50s MoneySaving
30 replies 13.3K views
"Special Pensioner Bonds paying "market-leading" fixed savings rates will be available from January 2015 to all over-65s, Chancellor George Osborne announced in today's Budget..."
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Budget 2014: Pensioner Bonds for over-65s

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  • Pensioner bonds that start as from January 2015, BUT are only for pensioners over 65.

    Meaning that some female pensioners in receipt of their State Pension won't be able to get their Pensioner Bonds because of being under 65.

    My very first thought personally was "Another thing I have to wait till my personal revised State Pension Age for even though I'm a pensioner (ie over 60 and retired)", which was closely followed by "....OH.....they are going to make me till wait about 2 years after I reach my revised State Pension Age to be able to get them. Whereas men will be able to get them the second they reach THEIR State Pension Age:mad:".

    Surely Pensioner Bonds should be applicable to all pensioners (ie everyone 60+ who is retired) or, at the least, all pensioners who have reached their personal State Pension Age?
  • CardewCardew Forumite
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    Most of the reports state that each pensioner will be able to invest up to £10,000 in these bonds; and I agree that is probably correct.

    However that wasn't what the Chancellor stated in his speech, and indeed the extract from the full Budget statement doesn't say that either!
    launching in January 2015 a range of fixed-rate, market-leading savings bonds for people aged 65 and over, taxable in line with all other savings income. Interest rates and individual investment limits will be confirmed at Autumn Statement 2014 to take account of prevailing market conditions but the central assumption made at Budget 2014 is that NS&I will launch a 1-year bond paying 2.8% gross/AER and a 3-year bond paying 4.0% gross/AER, with an investment limit of £10,000 per bond.
    Could for instance somebody have a £10k in a 1 year bond and also £10k in a 3 year bond? It doesn't even preclude people having several £10k bonds.

    Wishful thinking I know! but
  • BigglesBiggles Forumite
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    Osborne says rates could hit 2.8% for one-year bonds and 4% for three-year bonds
    Woo, as much as that! I'll have to take a minute to calm down, the excitement's not good for me at my age.
  • mikemoatemikemoate Forumite
    414 Posts
    Before tax? You can get more than that in a Santander 123 account!!!
    Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote.
    -Benjamin Franklin
  • edited 20 March 2014 at 4:08AM
    alanqalanq Forumite
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    edited 20 March 2014 at 4:08AM
    Cardew wrote: »
    Could for instance somebody have a £10k in a 1 year bond and also £10k in a 3 year bond? It doesn't even preclude people having several £10k bonds.

    "1.89...the central assumption made at this Budget is that NS&I will launch a 1-year bond paying 2.8% gross/annual equivalent rate (AER) and a 3-year bond paying 4.0% gross/AER, with an investment limit of £10,000 per bond. Precise details will be confirmed at Autumn Statement 2014..."

    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/293759/37630_Budget_2014_Web_Accessible.pdf

    With National Savings Certificates one could have a maximum holding of both 3-year and 5-year issues of each issue of certificates. It seems likely that the same principle would apply for Pensioners' Bonds.
    Cardew wrote: »
    It doesn't even preclude people having several £10k bonds.

    I think that is taking optimism a bit too far!
  • CardewCardew Forumite
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    alanq wrote: »
    "1.89...the central assumption made at this Budget is that NS&I will launch a 1-year bond paying 2.8% gross/annual equivalent rate (AER) and a 3-year bond paying 4.0% gross/AER, with an investment limit of £10,000 per bond. Precise details will be confirmed at Autumn Statement 2014..."

    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/293759/37630_Budget_2014_Web_Accessible.pdf

    With National Savings Certificates one could have a maximum holding of both 3-year and 5-year issues of each issue of certificates. It seems likely that the same principle would apply for Pensioners' Bonds.
    Originally Posted by Cardew View Post

    It doesn't even preclude people having several £10k bonds.



    I think that is taking optimism a bit too far!

    That's what I thought. However:

    http://www.ftadviser.com/2014/03/19/pensions/pensioner-bonds-created-to-help-less-wealthy-savers-24i0XIvknmF2Y0k5arwidO/article.html
    Consumers aged 65 and over will be allowed to save up to £100,000 in the bonds, which will be available from January next year.
  • mcgspmcgsp Forumite
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    Will the bonds offer tax free rates?
  • CardewCardew Forumite
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    mcgsp wrote: »
    Will the bonds offer tax free rates?


    No!


    Interest will be taxed at your marginal rate; i.e. 20% if your total income is under approx £40k pa.
  • alanqalanq Forumite
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    Isn't Pensioner Bond a strange choice of name for this product? There will be women of state pension age but under 65 and thus ineligible and people over 65 who for whatever reason are not drawing a state pension but will it seems be eligible.
  • CardewCardew Forumite
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    Pensioner bonds that start as from January 2015, BUT are only for pensioners over 65.

    Meaning that some female pensioners in receipt of their State Pension won't be able to get their Pensioner Bonds because of being under 65.

    My very first thought personally was "Another thing I have to wait till my personal revised State Pension Age for even though I'm a pensioner (ie over 60 and retired)", which was closely followed by "....OH.....they are going to make me till wait about 2 years after I reach my revised State Pension Age to be able to get them. Whereas men will be able to get them the second they reach THEIR State Pension Age:mad:".

    Surely Pensioner Bonds should be applicable to all pensioners (ie everyone 60+ who is retired) or, at the least, all pensioners who have reached their personal State Pension Age?


    Where do you draw a line for the term 'pensioner' and why 60+?


    There are disabled ex-servicemen in their 20's drawing a full disability pension.


    Servicemen, Policemen, Firemen in their 40's or 50's drawing a pension.


    There will be plenty of people over 65 in full time employment who have deferred their State Retirement pension until they cease employment.


    Full details will published after the Autumn Statement and I suspect some of the anomalies will be addressed.
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