Changes to NS&I Pensioner Growth Bonds

Changes to NS&I Pensioner Growth Bonds image

In January 2014, there was much excitement as websites crashed in the demand to invest in the new NS&I Pensioner Growth Bonds. These bonds, a “rabbit pulled out of the hat” by Chancellor Osborne in the 2013 Budget offered market busting rates at 2.8% for a one-year bond and 4% for a three-year bond.

A year on, and the first of these bonds are due to mature in mid-January. NS&I growth bonds tend to have an automatic rollover option, so if you are invested in the one-year bonds please exercise caution, there will be no market busting rates in 2016. Indeed, Chancellor has recently announced that the rate for the renewal of these bonds will be 1.45%. Whilst not out of line with current market rates for a one-year bond, this is far from the market leading offer previously available and you could do better by shopping around. The cynic may say that there is no general election to be one in 2016, but this is certainly a disappointing reduction in rates for investors.

Obviously, investors in the three-year bond still have another two years at 4%, but again unless overall interest rates have risen significantly since then, do not expect to maintain that level of return.

Ethical futures subscribe to a number of sources which are regularly updated with current market rates and are able to provide guidance to you in connection with suitable deposit-based investments.

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