Government-backed pensioner bonds paying an annual interest rate of up to 4 per cent have gone on sale today, with experts predicting huge demand from investors.
The bonds, first promised in the March Budget and guaranteed by the Treasury, are available to people aged 65 and over through National Savings and Investments and have a limit of £10,000 per bond per person. The minimum investment is £500.
The one-year bonds pay an annual interest rate of 2.8 per cent, while three-year bonds pay the higher rate of 4 per cent.
Interest on the bonds will be taxed in line with the individual’s usual income tax rate.