Richard Wadsworth highlights the importance of exploring all the options

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.

You can read the whole article in The Scotsman here
You can view Richard Wadsworth’s profile here

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 enquiries@carbonfinancial.co.uk. or you can also follow us on Facebook, Twitter or LinkedIn.