The Government has revealed how much interest its new Pensioner Bonds will be paying from January.
The Government has announced the interest rates that will be paid on its Pensioner Bonds when they launch in January.
The one-year version will pay 2.8% gross (2.24% for a basic-rate taxpayer and 1.68% for a higher-rate one), while the three-year version will pay 4% gross (3.2% for a basic-rate taxpayer and 2.4% for a higher-rate one). These are the same rates George Osborne announced in this year's Budget, which has surprised some experts, who thought rates would have dropped between now and then.
Interest will be paid annually, not monthly, and non-taxpayers will need to claim it back from HMRC as it will not be paid gross.
The minimum amount you can save in Pensioner Bonds is £500 and the maximum is £10,000.
Pensioner Bonds will be available directly from NS&I online, over the phone and by post.
The exact date when they will be launched hasn't been confirmed yet.
For more on how they work, head to Pensioner Bonds explained.
How the rates compare
Here’s how these rates compare to other top savings accounts available right now, starting with the one-year bonds.
|
Savings account |
Interest rate (AER) |
Minimum deposit |
|
Islamic Bank of Britain |
1.90% |
£1,000 |
|
FirstSave Fixed Rate Bond |
1.85% |
£1,000 |
|
ICICI Bank HiSAVE |
1.85% |
£1,000 |
And here’s how the three-year bonds look.
|
Savings account |
Interest rate (AER) |
Minimum deposit |
|
Secure Trust Bank Fixed Rate Bond |
2.51% |
£1,000 |
|
Shawbrook Bank Fixed Rate Bond |
2.50% |
£5,000 |
|
State Bank of India Fixed Deposit |
2.50% |
£10,000 |
More on pensions and retirement:
Pension firm failings costing retirees