Pensioner bond launch crashes NS&I website

15 January 2015

Pensioner bonds from National Savings & Investments (NS&I) finally launched yesterday, (16 January 2015), but surging demand for the inflation-busting products caused the provider's website to crash.

Two options are available for savers aged 65 and over - a one-year Guaranteed Growth Bond paying 2.8% before tax (2.24% after basic-rate rate has been deducted, 1.68% after the higher-rate and 1.54% after the additional rate) and a three-year version paying 4% (3.2%, 2.4% or 2.2% after tax).

Interest is paid on maturity for the one-year bond but annually on the three-year option so savers will benefit from compound interest. The minimum amount that can be deposited is £500 and the maximum £10,000 per person and the bonds can be held by an individual or jointly by couples.

However, demand for the bonds has been so huge that the NS&I website crashed repeatedly on the morning of the launch.

A spokesperson for NS&I said: "We're currently experiencing high demand for our new 65+ Bonds. We expect them to be on sale for months not weeks and would like to reassure savers that there is no need to rush to invest. We're grateful to our customers for their patience."

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Patrick Connolly, a certified financial planner at Chase de Vere, said: "NS&I expects them to be available for 'months rather than weeks', but we would still encourage savers to act sooner rather than later."

However, he warns: "While these bonds offer market-leading rates, they are far from being the cash panacea which some might suggest. These products cannot be held within a tax-free cash Isa and don't pay regular income."

He added: "To be of most value, pensioner bonds would be allowed within a cash Isa and be capable of paying a monthly income, even if savers had to accept a slight lower interest rate in order to receive this. This would make them far more useful for pensioners trying to generate income from their cash savings."

In the meantime, Connolly acknowledges the "stand-out rates and complete security" on offer from the bonds and says Chase de Vere "will be advocating pensioner bonds to many of our clients who are able to lock their money away and want to achieve a better return on their cash savings".

Top rates

NS&I's pensioner bond rates are far higher than the best available from traditional banks and building societies. According to, the top rate on one-year deals is currently 1.85% (1.48%) from internet bank FirstSave and Indian-owned bank ICICI Bank UK. That means older savers can get an extra £95 interest on the full £10,000 entitlement on the NS&I bond.

It's worth noting that, with the 65+ bonds, savers needing access to their money will be able to withdraw it but will do so with a penalty equivalent to the loss of 90 days' interest. If the full deposit is cashed in within 90 days of investing, bondholders will get back less money than they originally invested.

Bonds can be opened over the phone, by post or online. The phone number is 0500 500 000 and calls are free from a BT landline.

To apply by post download and print out the application form available here. You will need to return it to NS&I at 65+ Guaranteed Growth Bonds, National Savings and Investments, Glasgow, G58 1AD and include a cheque for the amount you wish to deposit.

To apply online, visit and fill in the webform. At the time of writing, the website was hit by teething problems and experiencing difficulties in submitting applications.

Before opening an account, bear in mind that 65+ Guaranteed Growth Bonds are fixed-rate investments with set terms so there is no right to cancel should you change your mind.

Find out everything you need to know about the new pension rules and how to plan ahead for the retirement you deserve with our new magazine, How to Retire in Style. The magazine is available to buy now from all leading newsagents, or can be ordered online at

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