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| Chancellor announces 2.2% government-backed savings bond | |
| (35 minutes later) | |
| Savers desperate for a better return on their cash will be able to take out a new “market-leading” government-backed savings bond paying around 2.2%, the chancellor, Philip Hammond, has announced. | Savers desperate for a better return on their cash will be able to take out a new “market-leading” government-backed savings bond paying around 2.2%, the chancellor, Philip Hammond, has announced. |
| The government expects about 2 million people to snap up the bond, which will be offered by National Savings & Investments from spring 2017 and will be for savers willing and able to tie up their money for three years. | The government expects about 2 million people to snap up the bond, which will be offered by National Savings & Investments from spring 2017 and will be for savers willing and able to tie up their money for three years. |
| The expected 2.2% interest rate is better than the top rate currently available on a three-year savings bond, which is 1.63% from Ikano Bank, and the new product will be available to anyone aged 16 or over. But some commentators were disappointed that the maximum investment will be £3,000. Someone investing the full amount could earn a total of just over £200 in interest after three years. | The expected 2.2% interest rate is better than the top rate currently available on a three-year savings bond, which is 1.63% from Ikano Bank, and the new product will be available to anyone aged 16 or over. But some commentators were disappointed that the maximum investment will be £3,000. Someone investing the full amount could earn a total of just over £200 in interest after three years. |
| Martin Lewis, founder of the website MoneySavingExpert.com, said: “This new NS&I bond isn’t the chancellor’s rabbit out of a hat – it’s more of a mouse. Unlike its predecessor, the pensioner bond, which allowed people to save up to £10,000 at up to 4% for three years, this is £3,000 at a likely 2.2% ... Certainly any account that beats the paltry rates of interest that we have currently is to be welcomed, but I don’t see many people whooping.” | Martin Lewis, founder of the website MoneySavingExpert.com, said: “This new NS&I bond isn’t the chancellor’s rabbit out of a hat – it’s more of a mouse. Unlike its predecessor, the pensioner bond, which allowed people to save up to £10,000 at up to 4% for three years, this is £3,000 at a likely 2.2% ... Certainly any account that beats the paltry rates of interest that we have currently is to be welcomed, but I don’t see many people whooping.” |