Guaranteed income bonds are offering far higher returns to taxpayers than the more highly advertised...
Guaranteed income bonds are offering far higher returns to taxpayers than the more highly advertised National Savings products, according to Baronworth Investment Services (BIS
The group, which specialises in the income bond market, said guaranteed monthly income bonds offer more competitive terms over two and five years than National Pensioner Guaranteed Income Bonds
According to BIS the National Savings two-year product provides 4.32%pa after basic rate tax while the equivalent guaranteed income bond provides between 5.15%-5.48%pa
The five-year National Savings product provides 4.52%pa after basic rate tax against 5.31%-5.6% for the equivalent guaranteed income product
Colin Jackson, director of BIS, said that advertising had encouraged a high level of response by tax payers to National Savings
He added: "National Savings Pensioners Guaranteed Income bonds are aimed at older people who are not as used to looking around the market for alternatives. If investors knew the alternative and voted with their cheque books, National Savings would be forced to offer more realistic returns
Jackson said for non-tax pay-ers, National Savings remains the better alternative. National Savings launched its new two-year tax free Savings Certificates on 8 October, offering 4.2%pa tax free or 5.25%pa equivalent grossed up rate at basic rate of tax
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