MSE News: Got a 1-yr Pensioner Bond? Your interest will plummet after fixed term ends

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Former_MSE_Paloma
Former_MSE_Paloma Posts: 531 Forumite
I've been Money Tipped! Newshound!
edited 15 December 2015 at 5:25PM in Over 50s MoneySaving
Nearly half a million savers will see the interest rate of their one-year Pensioner Bond plummet from 2.8% to 1.45% at the end of the fixed term...
Read the full story:

Got a one-year Pensioner Bond? Your interest will plummet after the fixed term

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  • Doc_N
    Doc_N Posts: 8,291 Forumite
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    Some might say (I couldn't possibly comment) that the Chancellor has already done enough for pensioners and might need to direct some efforts towards young people.

    And that it's only the grey voting power that's made it the way it is........ :)
  • agrinnall
    agrinnall Posts: 23,344 Forumite
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    I'm not sure why anybody would think this wouldn't happen at the end of the fixed term, it's what every other institution does and there's no reason why NS&I would be any different.
  • Castle
    Castle Posts: 4,219 Forumite
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    And there's no election this year!
  • Ectophile
    Ectophile Posts: 7,377 Forumite
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    The whole thing was a bribe to pensioners to get them to vote Conservative. Now the election's over, they have no reason to pay a stupidly high interest rate any more.
    If it sticks, force it.
    If it breaks, well it wasn't working right anyway.
  • Doc_N
    Doc_N Posts: 8,291 Forumite
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    Bribes, more bribes, and broken promises - that's the Government we're stuck with.

    Oh - and a failing NHS starved of cash. :(
  • Ken68
    Ken68 Posts: 6,825 Forumite
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    Yes I agree Doc.....too much done for the older generation, free bus pass, free medicine, winter fuel allowance etc ....time to help the young working.


    Signed OAP.
  • teddysmum
    teddysmum Posts: 9,475 Forumite
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    agrinnall wrote: »
    I'm not sure why anybody would think this wouldn't happen at the end of the fixed term, it's what every other institution does and there's no reason why NS&I would be any different.



    Exactly. Anyone who wanted to invest for more than a year could have taken a three year bond with a higher rate, anyway.


    Also, many savings accounts have an introductory rate or bonus, that only applies for one year.
  • McKneff
    McKneff Posts: 38,831 Forumite
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    Could someone off the top of their head tell me how much interest I would lose if I made a partial withdrawal of £5k please. Next week.




    No calculator to hand.....
    make the most of it, we are only here for the weekend.
    and we will never, ever return.
  • agrinnall
    agrinnall Posts: 23,344 Forumite
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    From the key features leaflet:

    Can be cashed in early with a
    penalty equivalent to 90 days’
    interest on the amount cashed
    in.


    So that's approximately 1/4 of the annual interest, the calculation is therefore:

    £5000 * 2.8% * 0.25 = £35
  • frugalfran
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    I'll be taking my money out for sure, then will wait and see what happens. If everyone did that I'm sure it would cause problems for the Gov't and they might have to re-think and offer a more attractive rate. So I'll be walking off and trying to help spur them into action.....
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