The Government will continue to offer pensioner bonds paying up to 4 per cent for an additional three months and plans to increase the amount available from £10bn to £15bn.
Speaking to the BBC’s Andrew Marr show yesterday, Chancellor George Osborne said the bonds had been “the most successful saving product this country had ever seen”.
Some 110,000 pensioners signed up in the first two days of the bonds going on sale in January, with 600,000 people in total signing up since launch.
Osborne said: “We will guarantee that it remains on sale for a further three months because this Government backs savers and supports people who do the right thing.”
The bonds are available those aged over 65 and pay 2.8 per cent on the one-year bonds and 4 per cent for three-year bonds.
The deadline to invest in the bonds is to be extended until 15 May, a week after the general election.
The chancellor rejected claims that it was unfair for those under 65 to be subsidising the scheme for better-off pensioners.
But think tank the Institute for Economic Affairs said it was wrong to extend the deadline.
Director general Mark Littlewood told the BBC: “Borrowing more expensively than the Government needs to is effectively a direct subsidy to wealthy pensioners from the working-age population.
“Pensioner bonds have never been anything other than a gimmick that will benefit pensioners at the expense of the taxpayer, and it beggars belief that the Government is prolonging such a foolish policy.”
