Pensioners Bonds

If you are aged 60 or over, then National Savings Pensioners' Bonds guarantee a monthly income while protecting your capital. They are good for non-taxpayers because all income is paid gross into your bank or building society - ie before any income tax is deducted. If you are a taxpayer you will have to let the Inland Revenue know this.

These type of bonds are low-risk and are a good option for the safe portion of your financial portfolio. What's more, you have the choice over how long you tie up your money. You can choose to invest for one, two or five years, or a mixture of these, and during that time the rate you receive will be fixed and guaranteed. Each time National Savings offers a new fixed rate Pensioners' Bond, it is known as a "series".

It's up to you how much you invest from a minimum of £500 to £1 million and it's best to use these bonds as a home for medium to long term savings. If you cash in your money early but give 60 days' notice you will lose some interest, but if you don't give any notice you will have a pay a penalty equivalent to 90 days' notice.

 

The advantage is that interest is calculated daily. Bear in mind that National Savings do not pay the best rates in the market, so you have to weigh up the pros and cons. You will have a secure investment, but your money won't necessarily be keeping pace with inflation.

At the end of the term you can continue with your investment, reinvest in a new bond, or cash it in. You can hold them either individually or with another person aged 60 or over.

You can get more information from the National Savings website (www.nsandi.com), from Post Offices, or by calling 0845 964 5000.

www.Investments.co.uk is the definitive guide to making the most of your money. You can also visit us at www.pensions.co.uk

 

UK Investments - Financial, Property & Other Investments - 1998-2008

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