In terms of new products coming to market, the Budget also included the launch of a pensioner bond paying market leading rates will be issued by National Savings & Investments open to everyone aged 65 or over and available from January next year.
The exact rates will be set in the autumn, to ensure the best possible offer, but Mr Osborne said the assumption is 2.8 per cent for a one-year bond and 4 per cent on a three-year bond. He added that rate was much better than anything equivalent in the market today.
Up to £10bn of these bonds will be issued, Mr Osborne confirmed, and a maximum of £10,000 can be saved in each bond.
Rick Eling, head of investment solutions at Sanlam UK, says the new NS&I Pensions Bond was a direct response to the very low rates offered on conventional bank accounts since 2008.
But Mr Eling warns the “enhanced” returns from the new bond look likely to be only just above inflation. He says many retirees might be better off if they considered holding a portion of their assets in something with real growth potential, like equities.
Mr Eling says: “This becomes more important with ever-rising life expectancies. We need to help people get over their fear of the stock market and take a longer term view.”