At the time the 3 year Pensioner Bonds from NS&I were launched offering a fixed 4% return, the offer rate was way above market rates at the time and is even more so today.
To be brutally honest, there’s no chance of earning anywhere near that figure today without taking an element of risk.
The stock market has performed well in recent years but potential volatility means it’s not going to be suitable for many pensioners particularly if this money represents the bulk of their savings nest egg.
For some it may be worth looking a little more closely at some of the more established peer to peer options – for example RateSetter is paying 3.3% on 30 day money today – although nobody has lost any money since it started over 7 years ago it’s important that you understand that your capital is at risk and is not covered by the Financial Services Compensation Scheme (FSCS) guarantee.
As for standard fixed rate options I’ve listed the best buys below – some of these names may not be familiar with some savers but they are all banks covered by UK FSCS so your money is as safe as it is with a high street bank or NS&I.
The decision is whether you put all your cash away for three years or perhaps split it so half in for three years and half for a shorter term – with interest rates possibly rising again later in 2018 or early 2019 we may see fixed rates creep up so maybe better to avoid locking all your cash away for 3 years as you may miss out on slightly higher returns.
Best Buys – fixed rate bonds as at 8 January 2018
- Charter Savings Bank 1.87% for 18 months
- Paragon Bank 2.05% for 2 years
- Masthaven Bank 2.08% for 30 months
- NS&I and United Trust Bank both 2.20% for 3 years
- Charter Savings Bank 2.21% for 3 years.