Savings: Interest rates on Pensioner Bonds cut


No quick return for NS&I Index Linked Certificates 150pxNational Savings & Investments (NS&I) has announced the interest rates payable to savers, who decide to roll over their 65+ Guaranteed Growth Bond when it matures on its first anniversary.

The NS&I product, often referred to as a Pensioner Bond, was launched by the Government last year with huge publicity and very attractive interest rates. Savers who took out the one-year fixed rate bond enjoyed an interest rate of 2.80% gross, well above other similar accounts and these are now starting to mature.

However, savers will be less happy with the interest rate they will receive in the future of they decide to rollover the maturity proceeds.

Options for savers with 65+ Guaranteed Growth Bonds

As the NS&I website explains, savers with a maturing 65+ Guaranteed Growth Bond have three options:

Option #1: Roll over to one-year Guaranteed Growth Bond

As the 65+ Guaranteed Growth Bonds were a special issue, they are no longer on sale, so NS&I is not offering a roll over, or reinvestment, into a product specifically aimed at the over 65s. It is only offering the option of rolling over into their ‘standard’ Guaranteed Growth Bond.

This is the default option, to put it another way, if you don’t tell NS&I you want to do something different, they will roll it over for a further year into the Guaranteed Growth Bond.

However, you might be disappointed with the rate, which will drop by almost half, from 2.80% to 1.45%.

Option #2: Roll over to a Guaranteed Growth Bond with a longer term

NS&I offer three other Guaranteed Growth Bonds with fixed terms of two, three and five years, all of which are available for you to roll over your Pensioner Bond.

However, the interest rates are again well below the previous rate of 2.80%:

  • Two years: 1.70% gross AER
  • Three years: 1.90% gross AER
  • Five years: 2.55% gross AER

Option #3: Cash I your bond

If you don’t like the interest rate on the roll over option, or you don’t want to tie up your savings for a fixed period of time, you could opt to cash in your bond and save it elsewhere.

What do you need to do?

If you select option one, you don’t need to do anything, NS&I will automatically roll over the maturity proceeds into a one-year Guaranteed Growth Bond.

However, if you prefer option two or three you need to tell NS&I at least two working days before your bond matures.

NS&I will write to every saver before their bond matures to outline their options in more detail and additional information can be found on their website by clicking here.

We are here to help

If you would like advice as to which is the best option for you, we are here to help.

Call Bev or Sarah today on 0115 933 8433 or email