In January 2015 NS&I are launching new Bonds for investors aged 65 and over. These are the Bonds announced by the Chancellor in his March 2014 Budget statement.
Full details of the Bonds will be available when they go on sale in January 2015.
The new Bonds at a glance;
What are the Bonds?
• Lump sum investments providing capital growth
• Choice of terms – 1-year and 3-year
• Designed to be held for whole term, but can be cashed in early with a penalty equivalent to 90 days’ interest
When do they go on sale?
• January 2015 – exact date to be announced
• Available for a limited period only
Who can invest?
• Anyone aged 65 or over
• Invest by yourself or jointly with one other person aged 65 or over
How much can I invest?
• Minimum for each investment £500
• Maximum per person per Issue of each term £10,000
What about interest?
• 1 Year Bond 2.80% gross/AER* (2.24% after basic rate of tax)
• 3 Year Bond 4.00% gross/AER* (3.20% after basic rate of tax)
• Fixed rates, guaranteed for the whole term
• Interest added on each anniversary
The tax position
• Interest taxable and paid net (with basic rate tax taken off)
• Higher and additional rate taxpayers will need to declare their interest to HM Revenue & Customs (HMRC) and pay the extra tax due
• Non taxpayers, and those eligible to have any of their interest taxed at the new 0% rate (which starts from April 2015), can claim back the tax from HMRC
• NS&I are not currently part of the R85 scheme so we can’t pay the interest gross on these Bonds
The government has set the total limit of subscription to £10 billion – Applications will be dealt on first come, first served basis and investors will be able to apply by post, online and by phone.