The government will continue to offer its pensioner bonds for a further three months after more than 600,000 people signed up to the scheme.
George Osborne revealed that the deadline for over 65s to apply for the scheme has been extended until after the general election in May due to its popularity.
Speaking on the Andrew Marr show, Osborne said the so-called “granny bonds” had been “the most successful saving product this country has ever seen.”
The scheme offers annual interest rates of 2.8 per cent for a one-year bond and four per cent for a three-year bond. Savers must have at least £500 to invest and are limited to an investment of £10,000 in each bond.
More than £1bn of the bonds were sold in the first two days of its availability last month, with the huge demand causing the National Savings and Investments (NS&I) website to crash.
Osborne said that he now expects NS&I to be offering up to £15bn in bonds.
The chancellor told the BBC:
We need to support savers in our economy. That is one of the things that went badly wrong in Britain 10 years ago and one of the things we’re trying to fix in this country.I think you have to see this in the context of a plan where there have been very low interest rates to support the economy in this period. That has hit savers. I think it is perfectly reasonable for a chancellor to say I want to support savers.We will guarantee that it [the pensioner bond] remains on sale for a further three months because this government backs savers and supports people who do the right thing.