Guaranteed income bonds continue to offer far better rates than National Savings Pensioners bonds. ...
Guaranteed income bonds continue to offer far better rates than National Savings Pensioners bonds.
Research by specialists Baronsworth has found that for a £15,000 investment on a one-year term, National Savings would provide 4.8% gross, 3.84% net of basic rate tax, while AIG's equivalent Monthly Income Bond would provide 5.19% gross, equivalent to 4.15% net.
This gap is also evident over longer time periods. National Savings offers 4.9% gross over a two-year term, compared with 5.54% gross for AIG. Over five years, the figures are 5% and 5.86% respectively.
Colin Jackson, director at Baronsworth, said: 'We continue to beat the drum loudly in the hope that pensioners will hear it, take notice and avoid National Savings Pensioners bonds like the plague. When it comes to those people with at least £5,000 to invest, and who are tax payers, they are far better off with a guaranteed income bond.'
While AIG dominates Baronsworth's list of best buys for bonds paying income monthly, the list of best buys for annual payouts is dominated by Pinnacle Insurance.
Over one year, AIG comes top for investments above £5,000, offering rates of 4.13% and up to 4.53% for investments of £40,000 and above.
For two-year bonds, Pinnacle offers rates of 4.58% for investments of £5,000-£9,999 and 4.93% for those above £50,000. Over three and four years, the group offers an annual rate of 4.77% for those investing £5,000 and, for a five-year term, 4.9%.
For more information on guaranteed income bonds, contact Baronsworth by dialling 100 and asking for freephone bondline. Alternatively, e-mail [email protected]
Baronsworth operates a commission sharing arrangement on all investments and does not charge any fees.
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