Are George Osborne's new Pensioner Bonds a good buy? They won't be launched until January 2015 and a lot could happen in that time. Including an interest rate rise (or two, even). Current estimates for the new NS&I bonds indicate 2.8% for one year and 4% for three years.
They're also limited to the first £10bn only. Should you, then, go for a Pensioner Bond?
4% paying bondIf you're older than 65 - sorry to state the obvious - then possibly yes. Currently the best offer by any NS&I bond currently is 2.6% (three years). "They're [the new bonds] market leading," says Jon Horton from Chamberlain de Broe financial advisers. "They're taxable, yes. But broadly there will be a lot of interest."
Given the surge in stock market values in the last 18 months, many cautious retirees will be put off shares, given there's less scope for buying at reasonable valuations. And, of course, there's the risk factor.
Ex-growthThere's also another issue for those who might have considered share-buying instead of a cash investment - disappointment in dividends and earnings. "The earnings growth that had been penciled in really hasn't come through for some FTSE 100 companies," says Horton.
The wash of public cash that will likely head into these new pension bonds will help deficit funding. It's also a poke in the eye to banks and building societies and their miserable rates.
£40,000 investmentBear in mind that the limit for each Pensioner Bond will be £10,000. For a couple that means a £40,000 maximum pot if you stick £10,000 inside each bond (2.8% for one year, 4% for three).
Also, the lifting of the ISA limit to £15,000 now widens your options considerably. You may need to make some finely calibrated decisions.
However careful stock market investing in dull, solid dividend-paying stocks - powerful plodders - are still worthy of attention say some. Spread your eggs, and all that.