Good reads from around the Web.
The wait is nearly over, glass-half-full-fans of a certain age. National Savings and Investments (NS&I) has revealed the first firm details of its upcoming ‘Pensioner Bonds’.
More is to come with the launch in January, but here’s what NS&I [1] says so far:
What are the bonds?
- Lump sum investments providing capital growth
- Choice of terms – 1-year and 3-year
- Designed to be held for whole term, but can be cashed in early with a penalty equivalent to 90 days’ interest
When do they go on sale?
- January 2015 – exact date to be announced
- Available for a limited period
Who can invest?
- Anyone aged 65 or over
- Invest by yourself or jointly with one other person aged 65 or over
How much can I invest?
- Minimum for each investment £500
- Maximum per person per Issue of each term £10,000
What about interest?
- 1-year Bond 2.80% gross/AER*
- 3-year Bond 4.00% gross/AER*
- Fixed rates, guaranteed for the whole term
- Interest added on each anniversary
The tax position
- Interest taxable and paid net (with basic rate tax taken off)
- Higher and additional rate taxpayers will need to declare their interest to HM Revenue & Customs (HMRC) and pay the extra tax due
- Non taxpayers, and those eligible to have any of their interest taxed at the new 0% rate (which starts from April 2015), can claim back the tax from HMRC
- Sorry, we’re not currently part of the R85 scheme so we can’t pay the interest gross on these Bonds
While the rates may still look laughably low to 60-somethings who remember the days of 10% interest on their savings, the bonds are table-toppers for those who are eligible to put money into them – and the 4% rate looks unbeatable, even with cash ISAs.
Here are a few media takes on these new bonds from:
- The Telegraph [2]
- The Guardian [3]
- The BBC [4]
- ThisIsMoney [5]
Who says there’s no upside to getting old? 🙂
From the blogs
Making good use of the things that we find…
Passive investing
- Why does everyone tout complex portfolios? – Oblivious Investor [6]
- Some people will never learn – A Wealth of Common Sense [7]
- Software is eating investment management – Abnormal Returns [8]
Active investing
- Are oil stock dividends safe? – Sizemore Insights [9]
- Investing in illiquid shares – iii blog [10]
- Are you being shown the whole market? – Maven Capital Partners [11]
- Riding the rollercoaster – DIY Income Investor [12]
- The case for investing in Bonmarche – Stockwatch/iii [13]
- Hedge funds: The state of play – Above the Market [14]
Other articles
- Working for the man: A last resort – Raptitude [15]
- How I screwed up my financial independence – Mr Squirrel [16]
- Where are the economists yachts? – Investing Caffeine [17]
- Learn from the losers – Tim Hartford [18]
- The case for a universal income – Simple Living in Suffolk [19]
- See the financial wood for the money trees – Under the Money Tree [20]
Product of the week: Not a pensioner? The Telegraph [21] reports that Yorkshire Building Society [22] is offering a fixed-rate savings bond touting a 2.4% headline rate, paying interest monthly.
Mainstream media money
Some links are Google search results – in PC/desktop view these enable you to click through to read the piece without being a paid subscriber of that site.1 [23]
Passive investing
- Ignore forecasters at all costs – Swedroe/ETF.com [24]
- Jack Bogle’s blind spot: International diversification – Yahoo [25]
- 3 lessons from a stock market ‘freak out’ – Roth/AARP [26]
- Dump your S&P index fund [Well, maybe [27]!] – MarketWatch [28]
- Passive investing’s foundations [For passive nerds] – Swedroe/ETF.com [29]
Active investing
- Don’t overlook the risks of individual bonds – MorningStar [30]
- Giles Hargreaves: 3 AIM stocks to buy and hold – Telegraph [31]
- Lessons from the sorry Beacon Hill saga – ThisIsMoney [32]
- 10 shares that pass the Buffett ‘moat’ test – Telegraph [33]
- John Lee: Focus on your existing shares [Search result] – FT [34]
Other stuff worth reading
- 122 things everyone should know about investing – Housel / Fool [35]
- Proof that you should get a life and work less – The Economist [36]
- Expensive estate agents are ripe for disruption – Guardian [37]
- ‘I spot and exploit pricing errors for a living’ – Telegraph [38]
- How to really invest like a billionaire – MarketWatch [39]
Book of the week: Who would have thought the rise and fall of an investment bank could make for gripping reading? Catching Lightning in a Bottle [40]
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- Reader Ken notes that: “FT articles can only be accessed through the search results if you’re using PC/desktop view (from mobile/tablet view they bring up the firewall/subscription page). To circumvent, switch your mobile browser to use the desktop view. On Chrome for Android: press the menu button followed by “Request Desktop Site”.” [↩ [45]]