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Double Blow for Those Seeking Income from Savings Bonds
17/02/2011
Pensioners who have savings bonds maturing now face a double blow. High inflation means the spending power of their money will fall and their income will drop by a third.
Savers who three years ago took a fixed rate bond paying interest monthly have received an income of more than 4.8 % after tax (6 % before tax), or some £50 a month before tax on each £10,000 in their account.
Now the best three-year bonds are paying just over 3.2 % after tax at best, cutting income to just £33 a month before tax.
However, the cost of living, measured by the retail prices index, is rising much faster at 4.8 %, and is expected to exceed 5 % this year.
If money is not paid into a new bond then interest could be as little as 0.08 p% after tax, reducing income to just 83p a month on each £10,000.
Homeowners aged over 55 years who will suffer such a loss in income and would like to know how much money the value of their property could release to help, can find out by contacting therightequityrelease.co.uk for equity release advice.
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