Older savers are finally given decent interest rates

The pensioner bonds released this week have proved so popular that the website offering them has struggled to keep up with demand.

The bonds, which are available for people aged 65 and older, pay interest of up to 4% a year. The government has launched them in a bid to help hard-pressed savers penalised by very low returns over the past few years.

Officially named “65+ Guaranteed Growth Bonds”, they pay interest of 2.8% over a one-year term or 4% annually over three years. Up to £10bn-worth of bonds are for sale through NS&I, the same organisation that deals with premium bonds.

Shortly after they went on sale on Thursday, the NS&I website was having problems, and there were also long queues for people wanting to apply by phone.

Jane Platt, chief executive of NS&I, said: “We expect these bonds to be on sale for months, not weeks, and would like to reassure savers that there is no need to rush to invest.”

But Sylvia Waycot, of Moneyfacts.co.uk, said many people risked losing out.

“Many of the people eligible for the newly-launched bonds must be feeling pretty miffed by the quietness of the actual launch, which is in stark contrast to the very loud original announcement made by chancellor George Osborne,” she said.

“While the bond is clearly marketed for any pensioner quick enough to apply, only those who signed up to the NS&I newsletter will have received the heads-up about its sneaky launch.

“This bond is going to be gone in days, if not sooner. If you want the chance to get hold of one, then waste no time in applying.”

Andy James, head of retirement planning at Towry, said the bonds offered good value.

“If you do get the chance to invest in these new bonds, despite the issues with the NS&I website, it is well worth doing,” he said.

“The returns are better than anything that any bank is offering at the moment. They are government-backed (so therefore very safe) investments.”

To invest in the bonds, visit www.nsandi.com or call 0500 500 000.