Five Questions On: Pensioner bonds


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These are the high-interest government-backed bonds?

They are indeed. They finally went on sale this week to such demand that the website run by National Savings & Investments was unable to cope.

Why was there so much demand?

They're so popular because of the high rates. The one-year bond pays 2.8 per cent while the return on the three-year bond is 4 per cent. That's much better than the nearest competition, paying around 50 per cent more than the average top five one-year fixed rate, and 6o per cent more than the average top five three-year fixed rate.

So where do I sign up?

Whoa there. Only those aged 65 and over are allowed to invest in the bonds. And then the most you'll be allowed to save will be £10,000 in each bond. However, you can put that sum into both of the bonds, meaning that pensioners can stash away £20,000 in the high-paying accounts and couples can put £40,000 in between them.

Is there a limit on how many people can apply?

There's a £10bn limit on the bonds, which means, in effect, that if everyone invested the maximum £20,000, only half a million pensioners would get one. That's why there's been such a rush this week. In fact, when they were launched on Thursday, one pensioner told The Independent that trying to get through on the website was "harder than getting Glasto tickets".

So I should move fast?

If the issue is oversubscribed then the bonds could be handed out on a first-come, first-served basis. If that happens, if you delay, you could miss out. In theory, going online to is likely to be the quickest way to apply to ensure you don't miss out. But with pensioners being unable to apply online this week because of high demand, trying a postal application instead may actually be a good idea.

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