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

sacko1305

If I reinvest in a 5 year bond @ 2.55%, there doesn't appear to be anything to stop me from closing it after say 1 year.
Although I would forfeit 90 days interest, this would still give me an annual return of around 1.9% - beating the 1.45% for their 1 year bond.
Am I missing something?

teddysmum

frugalfran wrote: »

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.....

But your money isn't needed (hence generally poor interest rates on savingsaccounts ). The bonds were a special perk to encourage (votes from?) older people.

teddysmum

sacko1305 wrote: »

If I reinvest in a 5 year bond @ 2.55%, there doesn't appear to be anything to stop me from closing it after say 1 year.
Although I would forfeit 90 days interest, this would still give me an annual return of around 1.9% - beating the 1.45% for their 1 year bond.
Am I missing something?

Do a forum search for threads started, when these bonds were announced, as I seem to recall the very same being discussed.

[Deleted User]

my first bond is maturing soon and was offered 1.45 for one year fixed. I am going for bank of baroda at 2%, I think I am. It was easy to give ns&i my choice online. Maybe I`ll use some for my next holiday

PennyForThem_2

Look at banks - as often the percentage given for using a current account is >2% although you have to meet conditions which is just a matter of setting up standing orders. Santander springs to mind.

http://www.moneysavingexpert.com/banking/compare-best-bank-accounts

jennifernil

TSB pay 5%, Lloyds 4%, BOS, Santander and others pay 3%. Al have funding requirements, and a maximum on which interest is paid.

Katiehound

jennifernil wrote: »

TSB pay 5%, Lloyds 4%, BOS, Santander and others pay 3%. Al have funding requirements, and a maximum on which interest is paid.

A little bit of juggling can buy you a nice little earner- and it will be interest free from the start of the new tax year if you are a standard rate tax payer (up to £1K) Loads of threads on the banking and budgeting board. It's certainly worth a bit of effort to reap £25 or more per month

harz99

teddysmum wrote: »

But your money isn't needed (hence generally poor interest rates on savingsaccounts ). The bonds were a special perk to encourage (votes from?) older people.

As evidenced by nothing being on offer for older people in todays budget.............

Doc_N

harz99 wrote: »

As evidenced by nothing being on offer for older people in todays budget.............

Perhaps Osborne thinks they've already had more than enough at the expense of the younger people paying for them.............

Roger1

Doc_N wrote: »

Perhaps Osborne thinks they've already had more than enough at the expense of the younger people paying for them.............

Don't start that old chestnut!