An announcement on Pensioner Bonds, designed to pay much better rates than conventional savings products, had been expected in the Autumn Statement. However, savers will have to wait until next Friday, 12 December, for details of the rates on offer.
It is likely that there will be huge demand for these bonds, so investors will need to move quickly in order to secure them. Patrick Connolly, a certified financial planner with Chase de Vere, says: "When they are launched, we could see a similar frenzy to that which accompanied the reopening of NS&I Index Linked Savings Certificates in 2011. Those products were closed again to new money after less than four months, and with a capacity of only £10bn, Pensioner Bonds could be closed after a much shorter period."
However, while the headline rates will be very attractive, with a maximum contribution of £10,000 per bond, the actual difference in interest in pounds and pence, after tax, will be minimal for many wealthier savers.
