Older savers planning to take out a pensioner bond are being advised to leave plenty of time for postal applications or run the risk of missing out.
Savers aged 65 and over are able to access two government-backed savings accounts paying up to 4% interest, but the deadline for signing up is midnight on 15 May.
The accounts are officially known as 65+ guaranteed growth bonds, and there is a three-year product paying 4% and a one-year version paying 2.8%. As well as boasting a table-topping rate, the 65+ bonds have the advantage of being run by National Savings & Investments, the government’s savings bank, which offers a guarantee that all money saved with it is 100% secure.
Pensioners can apply online at NS&I, by phone on 0500 500 000 or by post to NS&I, Glasgow G58 1WA. NS&I has been encouraging pensioners to apply online. Savers can put up to £10,000 into each bond per person, per issue, of each term, and can invest singly or jointly with one other person aged 65-plus. In other words, pensioners are able to put away up to £20,000 each, or up to £40,000 as a couple. The minimum investment is £500.
An NS&I spokesman said: “65+ bonds close for sale on Friday 15 May. Customers can buy the bonds online or over the phone up to 23.59pm, and postal applications must be received by this time or they will not be processed.”
The bonds have been on sale since January and the scheme was originally designed to close once £10bn had been invested by savers. However, in February, the chancellor, George Osborne, announced it would be extended until just after the general election.
The savings institution has declined to reveal the latest figures on take-up: it would only say that as of 12 March, £10bn of bonds had been sold to 825,000 customers. The next sales update will be issued after the product has been withdrawn from sale.
There are downsides for savers, including the fact that the bonds do not pay a regular income. And NS&I has said that if they are cashed in early, there is a penalty to pay equal to 90 days’ interest. Interest will be added each year, with the bonds paying out both the capital and accumulated compound interest on maturity.
