Pensioner bonds are big news since their launching in January of this year. The 65 and older crowd have discovered that these savings funds are a more profitable savings solution to traditional ISAs and Premium Bonds. Some savers may not have much experience purchasing financial products from National Savings and Investments (NS&I) so here compiled is all you need to know about NS&I and available financial offerings.
National Savings and Investment offers savings and investment products backed by the treasury. Retail investments offered through the NS&I are open to the general public and quite often limited time offers and subject to frequent change. If in the market for investments, it’s best to regularly visit their website. As an Executive Agency within the Chancellor of the Exchequer your invested funds are virtually guaranteed safe. While product offerings change regularly, the following products can be secured from NS&I: Direct Saver Accounts, Cash ISAs, Fixed Interest Savings Certificates, Guaranteed Growth Bonds, Guaranteed Equity Bonds, Income Bonds, Children’s Bonds, and Premium Bonds.
Essentially, investing in government issued bonds and certificates, you are lending money to the national treasury. As mentioned earlier, your investment is secure from risk and secured through the fund available to the government. Some of the NS&I product offering may pay interest, or be due to stock market fluctuation, inflation, or encashment penalties, meaning these are reason why you’d possibly be returned less money than was initially invested.
Depending on the chosen investment product, savers could have instant access to funds in savings account but others products such as bonds and savings certificate can only be cashed in early with financial penalties, often negating your investment earnings. The government announced plans for NS&I to provide savers options to grow their investments and invest in their futures. The pensioner bonds offered beginning in January 2015 support the savings goals of investors over 65. Increases have been made to premium bond investments, from £30,000 to £40,000 in June of last year, and increasing an additional £10,000 between 2015 and 2016. Several NS&I products yield tax-free gains; however, there are other products that require a declaration of income to HM Revenue and Customs. Before purchasing an investment financial product, study appropriate tax liability.