More than one million pensioners have invested more than £13bn in the government’s pensioner bonds, the Treasury has said.
This has made them the biggest-selling retail financial product in modern history.
The bonds, which were on sale through National Savings & Investments until Friday 15 May, have a yearly interest rate of 4 per cent over three years and 2.8 per cent over one year.
Chancellor George Osborne said: “The 65+ pensioner bonds have been a huge success.
“This is part of our long term plan to support savers and boost peoples’ financial security at all stages of life.”
The government had originally allocated £10bn for these bonds but this was extended due to their popularity and £15bn was made available.
However, Rhydian Lewis, the chief executive of London-based RateSetter, said: “While those over 65 will receive higher returns than those offered by the banks, the lack of monthly interest or capital repayment does not sit well with the income-generating needs of a retirement lifestyle.”
Adviser view
Gary Dunn, a Lancashire-based partner with True Potential Wealth Management, said: “As a component of your interest-bearing portfolio there is a place for pensioner bonds but I wouldn’t necessarily suggest putting all your money in them.”
See also: ‘Beware of fake NS&I website peddling pensioner bonds’
