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

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  • zygurat789
    zygurat789 Posts: 4,263 Forumite
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    Cut & pasted from the red Book

    •• 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.



    Their bonds, their rules. Seems fair to me.
    No mention of pensioners

    The only thing that is constant is change.
  • NAR
    NAR Posts: 4,863 Forumite
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    This is another of the by products for the feminists - equality! But just because it doesn't suit you please don't grumble about it! ;)
  • seven-day-weekend
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    And I shall be 65 in January 2015 :).


    Great, I will put my Local Government Lump Sum of £6k + into one . Very pleased :).
    (AKA HRH_MUngo)
    Member #10 of £2 savers club
    Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton
  • Mint1955
    Mint1955 Posts: 685 Forumite
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    NAR wrote: »
    This is another of the by products for the feminists - equality! But just because it doesn't suit you please don't grumble about it! ;)

    I expected my pension next December when I became 60 I now have to wait until I am 66 nothing to do with equality or feminism just plain bloody frustrated that I will lose thousands and as I am not working now I have got to find a job or go without for the next 7 years.
    Living the dream and retired in Cyprus :j

    http://forums.moneysavingexpert.com/showthread.php?t=5105296
  • seven-day-weekend
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    Mint1955 wrote: »
    I expected my pension next December when I became 60 I now have to wait until I am 66 nothing to do with equality or feminism just plain bloody frustrated that I will lose thousands and as I am not working now I have got to find a job or go without for the next 7 years.

    No you won't . You won't lose anything. You are not eligible until you are 66, so you have not lost anything by not having it at 60. However I agree it is frustrating to have the age pushed back, but you can't expect plans not to change in fifty years!
    (AKA HRH_MUngo)
    Member #10 of £2 savers club
    Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton
  • zygurat789
    zygurat789 Posts: 4,263 Forumite
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    adammedia wrote: »
    Freedom for Retirees! Instantlolly.co.uk have posted a great blog recently about the benefits of it. Have a look

    Have a look but don't take too much notice it is a load of rubbish having its facts wrong, opions based on faulty premises and ignoring the best bits.
    The only thing that is constant is change.
  • margaretclare
    margaretclare Posts: 10,789 Forumite
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    Wow. Tie up all your money for a fixed period of years at a fixed rate of interest and pay tax on the interest.

    I think I do better with my S&S ISA.
    [FONT=Times New Roman, serif]Æ[/FONT]r ic wisdom funde, [FONT=Times New Roman, serif]æ[/FONT]r wear[FONT=Times New Roman, serif]ð[/FONT] ic eald.
    Before I found wisdom, I became old.
  • Katiehound
    Katiehound Posts: 7,665 Forumite
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    and I'm not enticed either! I'm not sure why you would want to tie your money up this way- not exactly big bucks.You'd do almost as well with current a/cs at Lloyds & TSB.
    I have had a bond in the past from national savings and then (don't know if it is still the case) the interest was paid out gross so that the onus was on you to contact HM Tax & Revenue. I did do that eventually and told them it was a one off payment, then subsequently discovered they had reduced my tax code for the following years. It was resolved but I vowed after that to have products which paid tax at source. Much easier!!
    Being polite and pleasant doesn't cost anything! --
    Many thanks
    -Stash bust:in 2022:337
    Stash bust :2023. 120duvets, 24 bags, 43 dog coats, 2 scrunchies, 10 mittens, 6 bootees, 8 glass cases, 2 A6 notebooks, 59 cards, 6 lav bags,36 angels,9 bones, 1 knee blanket, 1 lined bag,3 owls, 88 pyramids = total 420 total spend £5. Total for 'Dogs for Good' £546.82

    2024:37 Doggy duvets,30 pyramids, 6 hottie covers, 4 knit hats,13 crochet angels,1 shopper, 87cards=178 £88.25 spent!!!
  • zygurat789
    zygurat789 Posts: 4,263 Forumite
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    Katiehound wrote: »
    and I'm not enticed either! I'm not sure why you would want to tie your money up this way- not exactly big bucks.You'd do almost as well with current a/cs at Lloyds & TSB.
    I have had a bond in the past from national savings and then (don't know if it is still the case) the interest was paid out gross so that the onus was on you to contact HM Tax & Revenue. I did do that eventually and told them it was a one off payment, then subsequently discovered they had reduced my tax code for the following years. It was resolved but I vowed after that to have products which paid tax at source. Much easier!!

    TBF the budget documentation did say that the interest rate and the periods would be fixed at the time of issue which will be some time in the future so judgement should be reserved. You should always be aware of whether or not your investments are taxable or nontaxable before you buy them because it makes a difference to the return. As a rule of thumb if you are in a taxable situation then you should not buy "tax free income" investments, unless it is a bond.
    I know an elderley lady who told HMRC that she received "income" from a bond and they taxed her on it. I spent a long time persuading HMRC that this was "return of capital" from a bond and, as such, was nothing to do with them.
    Not all monies that you receive are income, let alone taxable.
    The only thing that is constant is change.
  • Pincher
    Pincher Posts: 6,552 Forumite
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    There is something to be said for holding money in five year bonds. I would like to see how hackers get my money from NS&I when even I can't touch it.


    Assuming you can keep £100k in £10k bonds, I would create ten 5 year bonds, timed to mature every six months. Ideally, each bond will automatically rollover on maturity until further notice. This way, I get access to the principal without penalty at frequent intervals, and still get the maximum interest rate. In the first four years, I can buy one and three year bonds to hold the money ready.




    I know, pension funds built-up with tax rebates cannot be converted into Pension Bonds: but what if you can?
    They need to create a Protected Pension Bond where you may not spend the principal, only the interest, so you will not become a burden to the state, but you can pass the principal on to your beneficiary when you die. This also presents an interesting financing possibility for care and housing. A pensioner can get a £100k interest only mortgage, literally until death. A lien is put on the £100k pension bonds, so it is paid to the lender on death, without probate. While the pensioner is alive, the interest helps to pay the mortgage, or care. The satisfying part is, no dirty filthy annuity provider gets a penny of my pension. The part where I don't get to spend the pension pot I build up drives me up the wall.


    Without a tax rebate pension fund, the DREAM is you save up £100k inside an ISA, cash or S&S. Keeping the money inside the ISA, you buy £100k of Pension Bonds, and get the 4% TAX FREE.
    Of course they won't allow it. George Osborne wants part of the 4% BACK.
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