Jeff Salway’s article in yesterday’s edition of The Scostman highlights some of the drawbacks with the recently launched Pensioner Bonds.
On the face of it, the Pensioner Bonds offer a higher rate of return than anything else available in today’s cash savings market. The average one and three year fixed rate bonds currently pay 1.43 and 2.03 per cent respectively. However, after closer examination, Richard Wadsworth, financial planner at Carbon points out in the article; “If you haven’t made use of your Isa allowance you could direct up to £15,000 into an Isa and secure tax-free interest.”
The rates of 1.65 per cent over one year, and 2.15 per cent over three years are lower than that of the Pensioner Bonds, but the interest would be tax free.
Interest on the Pensioner Bonds is paid net of basic tax as they are not eligible for inclusion in Isas. Another drawback is that the interest is paid at maturity, therefore your investment won’t provide regular income.
Richard’s observations in The Scotsman highlight the need to seek professional advice, and to explore all of the options.
If you would like to discuss your financial planning options, please contact us with any questions you might have. You can do this by calling our head office on 0131 220 0000, or by emailing us at email@example.com. or you can also follow us on Facebook, Twitter or LinkedIn.
We have offices in Edinburgh, Glasgow, Aberdeen, Perth and London. You can contact us at any of our offices, or by email.
Carbon Financial Partners Limited is authorised and regulated by the Financial Conduct Authority. The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK.
The Financial Conduct Authority does not regulate some forms of tax advice.
Registered in Scotland #SC386400.
Registered Office: 61 Manor Place, Edinburgh EH3 7EG, Scotland.
© Carbon Financial Partners 2021
Site designed and developed by Art Department