UK gov pension bonds, anyone?

pension

(Arthur Hall) #1

Has anyone that is resident in France been successful in buying any pension bonds that are in the news recently?

I have understood that it is possible to buy them if 65 and in receipt of UK pension but not neccesarily resident in UK at time if purchase.


(Brian Milne) #2

The revenue is paltry unless you have a lot. A bank savings account will pay off better in most cases. Any revenue on them needs to be declared here in France. I turned down the offer of having some bought for me when I became 65 and took a convention present instead. There is also the added problem of exchange rate fluctuations and whilst there are lots of Euros for Sterling now a turn round would be a disaster. There are good savings accounts here in France if you have enough capital.


(Les Horrocks) #3

Hello Arthur, I agree with David - I can see nothing in the T&Cs about a residency requirement.
You will need a UK bank account, for you to pay them using the debit card function, and also for them to pay you back in the future.
It's worth a try. The online application system is quite slick. The website was a bit slow on day 2, when I signed up for mine, but it's probably much quicker now, after the initial stampede.
One potential downside is, the interest is paid net of UK income tax - 20% - so you'd have to be a UK taxpayer to get that back.
There's something strange about their pricing - 2.8% for a one year, 4.0% for a three year bond. I went for the 3-year (although madame might decide to spend it earlier). You can cash either bond in, anytime, with a penalty of 90 days interest.
But, if you keep the bond for 12 months, you can cash it in and still get 3% - so why bother with the one-year?
If you keep the bond for longer, the interest is compound - you get interest on the interest - so it gets better.
This does not constitute financial advice. There may well be a flaw in my logic... I'm sure someone will tell me?


(David GAY) #4

You don't have to be in receipt of a pension to buy these bonds but they are going by the misnomer of pensioner bonds. You simply must be 65 and over. There is no mention in the terms and conditions of having to be UK resident. US citizens are precluded from buying because of money laundering laws. The full terms and conditions can be found here

http://www.nsandi.com/files/published_files/asset/pdf/65-guaranteed-growth-bonds-brochure.pdf