Treasury unveils market-leading rates for 'pensioner bonds'

Interest rates for the new 'pensioner bonds', announced in the Budget 2014, have been set at a market-beating 2.8% for the one-year product and 4% for the three-year bond.

The new bonds issued by National Savings & Investments for the over-65s were originally announced by Chancellor George Osborne in March. The rates match the original estimates for the bonds, which have an investment limit of £10,000 each and will be available from January. Investments of between £500 and £10,000 can be made in each product, with a maximum of £20,000 per person or £40,000 per couple. Basic rate tax will be deducted automatically at 20%, regardless of the rate of tax payable by the taxpayer, meaning an individual investing the full £10,000 in the one-year bond will r...