Details of pensioner bonds revealed

Couples aged 65 and over will be able to save up to £40,000 at market-beating interest rates from next month under plans for pensioner bonds confirmed by Chancellor George Osborne today.

As of next month, those aged over 65 will be able to get a one-year fixed-rate bond paying 2.8%, while the three-year bond will pay an impressive 4%.

These rates are significantly higher than any others currently offered in the market, the Treasury said.

The bonds are designed to help older people earn the best interest available on the savings they rely upon after more than five years of being hammered by record low Bank of England rates at 0.5%.

Mr Osborne today confirmed plans, first announced in March's Budget.

There will be a minimum investment of £500 per bond and a maximum of £10,000 per bond per person while investors can also hold bonds jointly though these will also count towards an individuals' limits.

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It means a couple could hold £40,000 together, assuming each partner holding £10,000 in a one-year bond and £10,000 in a three-year bond.

The Treasury said the bonds were designed to provide certainty and a good return for those who have saved all their lives and now rely on their savings in retirement.

Mr Osborne said: "A key part of our long term economic plan is to support savers and boost hardworking people's financial security at all stages of life.

"That's why the Government is introducing savings bonds for people aged 65 and over, and why we're confirming today that these bonds will pay the best available interest rates.

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"They will give hundreds of thousands of older savers the certainty and comfort of a good return over the life of their investment."

The Treasury will issue up to £10 billion-worth of the products. Previous similar bonds issued by NS&I have sold out in four to six months.

The Government has not yet confirmed the date in January when they will begin to be issued, which will be announced by NS&I. They will be available by post, by phone or online.

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