Money Grouse: Couple have a little trouble with granny

RICHARD TAYLOR and his wife June are unhappy with their National Savings Pensioners Guaranteed Income Bond, or granny bonds as they are popularly known.

The couple, both over 65, each have pounds 5,000 worth of the five-year bond, which pays 7 per cent gross interest.

Because they like to keep their financial affairs separate, they want to see the monthly interest from their bond paid into different bank accounts. Yet, despite their best endeavours, they are seemingly unable to persuade National Savings to carry out this simple request.

Mr Taylor, a film writer and director living in West Hampstead, London, said: 'When we applied for these bonds earlier this year I asked on my form to be able to name my wife as the second interested party, and this was done. The interest on my bond was to be paid into my Midland Bank account.

'My wife omitted to do the same on her form, which worried us because of potential problems with inheritance.

'So I got in touch with National Savings and they sent me a transfer form so that I could add my name as the second beneficiary to her bonds. Her money was to be paid into her account with Abbey National.'

To the couple's anger, when interest began to be paid on both bonds it all went into Mr Taylor's account. He says: 'I contacted them again and they said they were unable to add my name to hers and have it paid into a second account. They said it was simply not allowed.

'I find this quite outrageous. This could make things difficult for tax reasons in cases where one of the spouses earns more than the other and wants to use up all of a couple's allowances.'

A National Savings spokesman said that when Mrs Taylor's bond account was closed it was transferred into the name of her husband, rather than a joint one in which he was the second beneficiary, as had been

intended.

Because it was not possible for income from one set of bonds to be paid into two accounts it all went into Mr Taylor's.

One solution would be to transfer the bond into a trustee account where the couple are both named as trustees. They can both name themselves as beneficiaries and can also ask to have the money paid into separate accounts. A new form is now on its way.