North Swindon MP, Justin Tomlinson, has welcomed the launch of a new National Savings and Investments Bond for pensioners.
The new scheme is designed to help retired savers get a better return on their savings income. NS&I will offer one year and three year bonds. The rates will be 2.8% gross/AER on the 1 year bond and 4% gross/AER on the 3 year bond; and will be subject to an investment limit of £10,000 per bond per person. This is a market leading rate and will support people who rely on their savings in retirement.
It is estimated the bond will attract one million pensioners and raise up to £10 billion. The bonds will be on the market for a period of months, giving those pensioners who wish to take advantage of the rates plenty of time to do so.
This builds on what the Government has already done to support pensioners:
- Guaranteeing the value of the state pension. The triple lock guarantees that the Basic State Pension always increases in line with the largest of earnings, prices, or 2.5 per cent. Since 2010 the annual basic state pension has risen by £800.
- Abolishing the default retirement age. Hardworking taxpayers who wish to work past retirement age now have exactly the same job security as young people, as employers are no longer able to compulsorily retire workers once they reach retirement age.
- Simplifying the state pension so people can be certain of what they will get. The Single Tier pension reforms will introduce a single flat rate pension set above the means test and based on 35 years of National Insurance contributions. It will particularly benefit women, low-earners and the self-employed
- Giving people more freedom over how they access their pension savings. From April 2015 those retiring with a defined contribution pension will have total freedom over how they access their pension.18 million people will be able to benefit from the reforms which are ending the system where people can be forced to buy an annuity, and removing the punitive 55 per cent tax rate people had been charged for taking out more than their tax free lump sum.
Justin Tomlinson MP said: "A key part of our long-term economic plan is to support savers and boost hardworking peoples’ financial security at all stages of life. That’s why we’ve introduced government-backed savings bonds for people aged 65 and over that pay the best interest rates in the market. They have already been a huge success and because this is the biggest ever retail bond offer, these bonds will be available for many months. This is great news for pensioners in Swindon. It’s time savers were rewarded and these bonds do that by giving older savers the certainty and comfort of a good return over the life of their investment.”
