Pensioner Savings Bonds

A new savings bond for the over 65s has been launched as a result of the Budget. Offering rates of 2.5% for a one year bond and 4% for a three year bond, they are sure to be popular when you consider the best rates on the high street are closer to 1.75% and 2.30% respectively.

Up to £10bn worth of the new bonds will be issued by National Savings and Investments with a limit of £10,000 each.

This is a real indicator that the Government is finally understanding the challenges met by Britain's cautious investors and the need to 'inflation proof' their savings.

With interest rates so low, cash deposits rarely offer anything other than a guaranteed loss and so the introduction of these bonds will really help those who rely on their savings income in retirement. This may even trigger banks to finally start giving value too.

For those not eligible to invest in these bonds, the news that ISAs are to be simplified will be welcome.

The investment limit will be increased to £15,000 in the summer and the mix between cash and stocks & shares is at the investors discretion, meaning that they will be able to hold the entire allowance in just cash, just stocks or a balance of both