Pensioner Bonds

Tentpole

The new Pensioner Bonds to be launched by NS&I in January 2015 are taxable. Fair enough, but NS&I (a Government body are they not?) says "Sorry, we're not currently part of the R85 scheme so we can't pay the interest gross on these bonds". As a non tax payer that means filling out the long R40 form and waiting months to claim any tax back from HMRC (now are they not a Government body as well?)
Only to be expected I suppose, there's always a catch. Clearly they hope that you just will not bother.

ColdIron

It does seem to be at odds with most of their other offerings that pay gross of tax

colsten

Have you had a look at the R40? Looks a very simple form. But if it's too much hassle, you can pass on the bonds, they aren't compulsory.

Tax payers money can be better spent than on R85-enhancements for the NS&I systems.

colsten

ColdIron wrote: »

It does seem to be at odds with most of their other offerings that pay gross of tax

I believe they always paid interest on Fixed Rate Bonds (which these will be) net after BR tax.

kidmugsy

The bonds are already going to be an extravagance with taxpayers' money. To ask for some extra IT expenditure as well is a bit of cheek.

2010

kidmugsy wrote: »

The bonds are already going to be an extravagance with taxpayers' money.

Oh I love this phrase "an extravagance with taxpayers money".

Just the same as "help to buy" and the "fund for lending" schemes.
Only those two being 1,000 times worse.

towny44

Some very negative comments here on what seems to me a very sensible question.
Why on earth are the new pensioner bonds not available with an R85 exemption surely, when most other savings providers products can be paid gross of tax, it seems a bit stupid for NS&I not to provide this for the new bonds.

Onawingandaprayer

towny44 wrote: »

Some very negative comments here on what seems to me a very sensible question.
Why on earth are the new pensioner bonds not available with an R85 exemption surely, when most other savings providers products can be paid gross of tax, it seems a bit stupid for NS&I not to provide this for the new bonds.

It's certainly ruled them out for me.

kidmugsy

2010 wrote: »

Oh I love this phrase "an extravagance with taxpayers money".

Just the same as "help to buy" and the "fund for lending" schemes.
Only those two being 1,000 times worse.

Indeed they are. But does that mean little ones don't count?

towny44

Onawingandaprayer wrote: »

It's certainly ruled them out for me.

Not sure if I will rule them out, it depends on the rate being offered, which might still be better tax paid than the average available before tax; and of course theoretically you can still reclaim the tax back from HMR&C.

colsten

towny44 wrote: »

surely, when most other savings providers products can be paid gross of tax, it seems a bit stupid for NS&I not to provide this for the new bonds.

it's not a bit stupid. Their systems don't support R85s, and there is no case to be made in the present climate for non-essential changes to IT systems as such changes cost a lot of money. For goodness sake, what is the problem with our pensioners? They would be happy filling in an R85 but seem to be unable to fill in an R40. If you have enough money to lock some of it away for 1 and/or 3 years, surely you can cope with getting some extra interest a bit later?

Onawingandaprayer wrote: »

It's certainly ruled them out for me.

Why would you pass on them if you are eligible?

A normal savings account pays you 1.5% at best. The pensioner bonds are rumoured to pay at least 2.8%, of which 2.24% would be paid to everyone, so 0.74% more than a normal savings account.
The remaining 0.56% can be claimed with an R40.