Pensioner Bonds Guide

libra10

I think the limit of £10K per person per bond still stands. Perhaps this is also per tax year so the richest pensioners can fill their boots again after the 6th of April. I could be wrong but there are no hard and fast rules to election bribery when in power. What is certain is that tax payers will be paying for the cost of this scheme.
J_B.

My husband and I have taken advantage of these bonds, and by no standards do we consider ourselves to be rich.

For the past several years, interest rates have declined to almost zero percent, meaning that those who have prudently saved are paying for those who have been less responsible!

Why do people resent those who have taken responsibility for paying their own way through life, and begrudge them being given any concessions?

colsten

Joe_Bloggs wrote: »

@Archibald and all
The Government can borrow at 0.6% and pay rich pensioners 4% on £15 billion. The cost is not the amount of the bonds. It is the lost potential of other things you could have done with the interest on the money. Do the maths!

I don't think anyone said it was the cost of the bonds? What 'lost potential' did you have in mind?

Your snipe at "rich pensioners" is quite uncalled for, btw. There is nothing exactly rich about having £20K in savings once you get to 65 - and some of the people availing themselves of these bonds are not actually maxing the bonds as they don't have £20K. I should also mention that some means-tested benefits allow up to £16K savings - - - so will you next call benefits claimants rich?

Primrose

Joe_Bloggs wrote: »

@Archibald and all
The Government can borrow at 0.6% and pay rich pensioners 4% on £15 billion. The cost is not the amount of the bonds. It is the lost potential of other things you could have done with the interest on the money. Do the math.

Just because I can afford to buy Pensioner Bonds i do not regard myself as wealthy. . I and many others who bought these bonds have saved all our lives to help fund our retirement and avoid being a burden on the state. The interest rate on mortgages at the moment is at a generational all time low. People who are buying pensioner bonds now, including myself, were paying interest rates of up to 15% on our mortgages.

Pensioners in particular have had a very raw deal on interest rates for several years now. Many rely on reasonable interest rates on savings to supplement the truly awful annuity rates they have been getting on their pensions. In the interests of fairness, why shouldn't they benefit if the government wants to redress the balance a little? The government will be recouping the tax on interest on them anyway.

alanq

colsten wrote: »

This is just not true, as has been discussed before. Nobody needs to pay tax on money they have not received.

Tax is due when interest is credited to an account whether or not it has been "received".

"If you're a higher- or additional-rate taxpayer, you'll need to declare the interest each year on your self-assessment form as with any other savings. For the three-year bond, this will actually mean that you're paying the extra self-assessment tax before you get your hands on any interest, as it's added to the account annually, so you only get it when the bond matures. "

http://www.moneysavingexpert.com/savings/pensioner-bonds

alanq

"The chancellor told the BBC he was extending the deadline for over 65s to apply to May since the idea had proved "enormously popular and successful"."

http://www.bbc.co.uk/news/uk-politics-31241867

How can the chancellor extend a deadline when there was never one in the first place? The cut off was when £10 billion had been raised. No date was mentioned.

"However, Mr Osborne said he expected this figure to be extended to £15bn and the deadline moved until after 15 May, a week after the general election."

65+ bonds "guaranteed" to be "on sale for another 3 months".

Confusing? A guarantee and an expectation seem to me to indicate different things. I think a problem with the BBC report. It seems the date is guaranteed and the sum raised is an expectation.

"More than 610,000 savers have already invested a total of £7.5billion in the high-interest accounts since they were launched less than four weeks ago."
http://www.dailymail.co.uk/news/article-2944569/Sales-pensioner-bonds-extended.html

2010

I don`t see these bonds, as some do, as being subsidised by the taxpayer.The savers are in fact loaning the government money.
Unlike the FLS and "help to buy" where cheap money is encouraging people to borrow money and so pushing up the price of property to false levels.

I do agree that the 65+ bonds are a blatent election bribe to reliable group of voters.

colsten

alanq wrote: »

Tax is due when interest is credited to an account whether or not it has been "received".

What point are you trying to make? What is the difference between having had your interest credited and having it received? Do you actually understand how HR/AR tax works? For example:

• you have taken out a £10K 3 year bond on April 5 2015. You receive £320 in interest on April 5 2016. The £320 is taxable income for 2015/16 and further tax is payable on this amount
• the latest date your self assessment for the tax year 2015/16 is due is on January 31 2017
• if you do owe any tax for 2015/16 - which is by no means a certainty as you could have other amounts to offset - the additional tax is then due, or you can choose to have it collected through your adjusted tax code for 2017/18
• similar is true for the following 2 years

alanq wrote: »

"If you're a higher- or additional-rate taxpayer, you'll need to declare the interest each year on your self-assessment form as with any other savings. For the three-year bond, this will actually mean that you're paying the extra self-assessment tax before you get your hands on any interest, as it's added to the account annually, so you only get it when the bond matures. "

http://www.moneysavingexpert.com/savings/pensioner-bonds

At no point will anyone have to pay any tax on any money they have not received yet.

I am still of the view that no HR/AR tax payer will blink an eyelid about the few extra quid they might have to pay.

Eco_Miser

alanq wrote: »

"For the three-year bond, this will actually mean that you're paying the extra self-assessment tax before you get your hands on any interest, as it's added to the account annually, so you only get it when the bond matures."

As is true for any bank-issued three year 'bond' which adds the interest to the bond annually.

nilrem_2

What amused me is the headline in the Times today which reads "Windfall for pensioners" almost implying that all pensioners are going to get a 'golden' payout, It's just a savings account, admitted it pays better than other accounts but it has a £20k cap per person and I do not see how it is a windfall!

Oblivion

nilrem wrote: »

What amused me is the headline in the Times today which reads "Windfall for pensioners" almost implying that all pensioners are going to get a 'golden' payout, It's just a savings account, admitted it pays better than other accounts but it has a £20k cap per person and I do not see how it is a windfall!

Exactly. Assuming you are a 20% tax payer and put the maximum £10,000 in each and stay the distance ...

The 1 year bond will net you £224

The 3 year bond will net you £991.05

Hardly life changing ... still better than a poke in the eye with a sharp stick though.