NS&I is cutting the rate on its 3-year guaranteed growth bonds from 2.2% to 1.95%, and the rate on its 3-year guaranteed income bonds from 2.15% to 1.9% on 10 April 2018.
NS&I has said it is reducing the rate on these guaranteed bonds, because they have been so popular since being relaunched in December. The organisation has a Net Financing Target, and will tweak the rates on popular products to ensure it doesn’t fall short or overshoot the target.
The 65+ guaranteed growth bonds (known as pensioner bonds) were available between January and May 2015 for people aged 65 and over.
Hargreaves Lansdown personal finance analyst Sarah Coles said: “Pensioners may be relieved to hear that the chair isn’t being whipped away just as they go to sit down. However, they shouldn’t be tempted to settle for the 2.2% on offer from the three-year guaranteed growth bond. In the current market they can get up to 2.26% over this period.
“That’s assuming that a three-year fix is still the right option for them. When any fixed rate matures, it’s a valuable opportunity to revisit whether you need more flexibility, whether you want to fix for longer, and whether cash is the right place for this part of your portfolio at all.”
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