Pensioner bonds: a guide to the fixed-rate savings bonds for over-65s

Money Advice Service

65+ Guaranteed Growth Bonds are no longer available for sale. This page explains how they worked, when they were launched and includes some useful links to alternative investments.

No longer available

The National Savings & Investments’ (NS&I) 65+ Guaranteed Growth Bonds are no longer for sale.

For more information, or if you already have a bond, visit the NS&I website.

What are pensioner bonds?

These bonds are no longer available on the market.

Pensioner bonds were fixed-rate savings bonds from government-backed NS&I.

They’re officially called 65+ Guaranteed Growth Bonds, but are sometimes referred to as pensioner’s guaranteed income bonds.

The government launched them in January 2015 to help people aged 65 or over get more interest on their savings.

A fixed-rate savings bond is a type of savings account. You invest a lump sum for a set period of time (the term).

The interest rate is fixed at the start and stays the same for the whole term.

Read our guide to National Savings & Investments.

Things you need to know about pensioner bonds

  • If you have a Lasting Power of Attorney or a Court of Protection Order for someone, you can apply on their behalf.
  • The bonds don’t pay a regular income. Interest is added to your account on each anniversary and paid at the end of the term.
  • If you take out any money during the term of your guaranteed income bond, you’ll pay a penalty of 90 days’ interest on the amount you’ve withdrawn.
  • There’s no cooling-off period. If you cash in your bond within the first 90 days, you’ll get back less than you invested because of the 90-day interest penalty.
  • The interest is taxable and is paid with 20% tax taken off. If you’re a higher-rate or additional-rate taxpayer you have to declare the interest to HMRC and pay the extra tax due. If you’re a non-taxpayer or pay 0% on your savings income, you can apply for a refund of the tax using form R40. From 6 April, 2016, the rules for tax on savings interest are changing. From that date, interest will be added to these bonds without basic-rate tax deducted.
  • There’s no cooling-off period. If you cash in your bond within the first 90 days, you’ll get back less than you invested because of the 90-day interest penalty.

The Personal Savings Allowance

As of April 2016 you are entitled to a personal savings allowance.

This means you don’t pay tax on the first £1,000 you earn from savings (or the first £500 if you’re a higher rate taxpayer).

Find out more about the Personal Savings Allowance.

This article is provided by the Money Advice Service.

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