Formally known as the 65+ Guaranteed Growth Bonds, Osborne pledged in his last March's Budget that the bonds would offer far better rates than current bonds on the open market.
The bonds are on sale through National Savings & Investment. Investments are limited to £10,000 per bond per person, so each saver can invest a total of £20,000. Couples can hold bonds jointly.
The bonds being issued pay a 2.8% gross annual interest rate over a one-year term and a 4% interest rate over a three-year term – before tax. Fixed rates are guaranteed for the whole term, with interest added on each anniversary.
Osborne said he was extending the availability of the bonds to ensure all those aged 65 and over who want to benefit from these could do so.
The bonds had been a ‘huge success’, and were already helping hundreds of thousands of older savers by boosting the return on their savings, he said. Some £7.5bn of the 65+ pensioner bonds have been sold so far, with over 610,000 savers purchasing bonds since their launch in January this year.
A revised projection for the total number of 65+ bonds that would be sold will be provided at next month’s budget. Total issuance could reach around £15bn, above the £10bn originally allocated.
‘I want to ensure as many older savers as possible can take advantage of these market-leading bonds, which is why I’m confirming today that potential savers will have months to invest in these hugely popular products, if they wish,’ the chancellor added.
