Pensioner bond website crashes due to demand
THE CHANCELLOR has proclaimed the launch of £10bn worth of guaranteed growth bonds for over 65s as a “huge success”.
A rush of interested investors caused the National Savings and Investments (NSI) website to crash after the bonds were launched yesterday morning.
The bonds offer market leading rates, at 2.8 per cent interest over one year or four per cent over three, and can only be bought by people aged 65 and over. By 3pm yesterday, 26,000 bonds worth £270m had been sold, after what the NSI said was “unprecedented demand”.
The chancellor commented: “Our long term plan is all about supporting savers. That’s why we have issued the largest retail bond ever – these pensioner bonds are going to be available for months not weeks. They are hugely popular, they offer great rates, and it’s time we rewarded savers and so that is what this government is doing.”
However, the new bonds have been slammed as a cynical political move by the Institute of Economic Affairs (IEA).
“It’s a gimmick and a bribe at the expense of taxpayers, and it’s ill-targeted,” said IEA’s Philip Booth. “The government is essentially borrowing money at least a one per cent higher interest rate than it needs to,” Booth stated. “This is a cost to taxpayers. The government should be trying to fund its debt by issuing gilts in the cheapest way possible.”
He added: “It’s a bad idea and it’s cynical.”