The Chancellor announced on 9th February that Pensioner Bonds will now remain on sale until 15th May 2015 – meaning that eligible investors will not be turned away in the run up to the general election (7th May). Following the unprecedented demand for products that, with annual interest rates of 4% for the 3 year bonds and 2.8% for the 1 year bonds, will pay savers the best available rates in the market, the government is extending the availability of the bonds to ensure all pensioners aged 65 and over who want to benefit from these bonds will have time to do so.

Highlighting latest sales figures which show it has seen the biggest sale of any retail financial product in Britain’s modern history, the Chancellor confirmed that the pensioner bonds will now be on sale for 4 months, until 15 May 2015. £7.5 billion of the 65 plus pensioner bonds have been sold so far, with over 610,000 savers purchasing bonds since their launch in January this year.

With an investment limit of £10,000 per bond per person, the bonds are available directly from NS&I by post, phone or online. While the formal projection for the total amount of 65 plus bonds that will be sold will be provided in the next Budget – which is in line with usual practice – the government now expects that the total issuance could be around £15 billion of these products, with the total number of savers benefitting from the bonds expected to top 1 million. The government had originally allocated £10 billion for the pensioner bonds.

The confirmation that the 65 plus bonds will remain on sale until May 2015 does not affect those savers who have already taken the opportunity to invest in these market-leading products, if they have already invested up to the available limit of £10,000 per bond per person.

It’s not surprising that pensioner bonds have been successful, at least measured by demand, when they pay risk-free market-beating rates of interest. The Government is thus choosing to borrow expensively from pensioners rather than cheaply from pension funds, and the Chancellor says that this will cost the taxpayer “several hundred million pounds”.

We are told that a key part of the government’s long term economic plan is to support savers at all stages of their lives and help hardworking people secure their financial futures.