George Osborne announced even more subsidised pensioner bonds. Bonds for pensioners will be extended for three months after a surge in demand.
What makes these bonds so appealing? They are one of the best savings options on the market, they pay an interest rate of 2.8 per cent for one year or 4 per cent for a three year investment.
Since they were first offered in January over 600,000 over 65’s have got their hands on these bonds. Around £10 billion has been set aside for the 65-plus bonds.
The Chancellor said on the Andrew Marr Show that it is crucial for economic recovery to encourage savers.
“Our 65-plus pensioner bond has been the most successful savings product this country has ever seen. Over 600,000 pensioners have benefited from it.”
“What I can confirm today is that we are going to guarantee that it remains on sale for another three months.”
However, not everyone is happy about this.
Mark Littlewood, director general at the Institute of Economic Affairs, said:
“This announcement well and truly proves that we are not all in it together. Borrowing more expensively than the Government needs to is effectively a direct subsidy to wealthy pensioners from the working-age population.”
“Pensioner bonds have never been anything other than a gimmick that will benefit pensioners at the expense of the taxpayer, and it beggars belief that the Government is prolonging such a foolish policy. It’s high time our politicians stopped buying votes with subsidies for the old and rich.”