Osborne's 'Pensioner bonds' - bribing OAPs with everyone else's money
 

Here's a really good blog that explains the subject:

http://stumblingandmumbling.typepad....ner-bonds.html

Wasting taxpayers' money doesn't sound much like conservatism to me, especially in light of Osborne spending the past 5 years banging on about austerity and waste.

Using taxpayers' money to buy votes from a certain client group, however, sounds like corruption to me?

Subsidising the savings rates of those who are able to invest £20,000 from general taxation also sounds like a transfer of wealth from the taxpayer in general to those who are on the wealthier end of the spectrum.

All in all a despicable policy hiding behind soundbites and the now very much disproven idea that all pensioners are on the brink of starving and/or freezing to death, despite their being the only group who have seen their incomes rise in real terms over the past 5 years, and being the only age-group besides the 55-64 age-group to see home ownership rates increase.

If this were open to everyone then, yeah, maybe. Still regressive but at least not as corrupt. If this were not in existence at all and the government stopped messing with interest rates on savings and borrowing via giving banks cheap cash so that they don't have to pay decent rates of interest on savings, awesome.

Re: Osborne's 'Pensioner bonds' - bribing OAPs with everyone else's money
 

Sounds just like every other election year since ever to me ...

Re: Osborne's 'Pensioner bonds' - bribing OAPs with everyone else's money
 

Ah that's alright then.

Re: Osborne's 'Pensioner bonds' - bribing OAPs with everyone else's money
 

No, it isn't. It's just not surprising.

Blair/Brown identified a middle class client group and bought its votes with tax credits. Cameron/Osborne have identified retired boomers and are attempting to buy theirs.

Re: Osborne's 'Pensioner bonds' - bribing OAPs with everyone else's money
 

I kinda got the economic point with tax credits - they arrested the GINI increase somewhat and hence ensured there was more money flowing around the economy. This, however, has no economic case I'm aware of that can be made for it.

I welcome education on this matter.

Re: Osborne's 'Pensioner bonds' - bribing OAPs with everyone else's money
 

And do we really think there are half a million pensioners with £20k spare a year around?

Re: Osborne's 'Pensioner bonds' - bribing OAPs with everyone else's money
 

Seems that way.

http://www.independent.co.uk/news/bu...s-9979409.html

http://www.dailymail.co.uk/news/arti...s-website.html

http://www.telegraph.co.uk/finance/p...-to-apply.html

So that's NS&I saying they'll sell out, 'financial experts', 'savings rates analysts, Moneyfacts and Savings Champion just from a 5 minute Google.

So, yes, it certainly does appear that there are half a million pensioners with the required capital. Joys of being on the good side of the housing market, final salary pension schemes, etc.

EDIT: Hugh - here's a thought. There are mortgage deals out there that are considerably lower than this 4% rate that the Chancellor is using our taxes to subsidise. If you were a homeowner using equity release or extending your mortgage to invest in this scheme would deliver a profit. A taxpayer subsidised profit. How insane is that?

Re: Osborne's 'Pensioner bonds' - bribing OAPs with everyone else's money
 

It's not working on me.

Re: Osborne's 'Pensioner bonds' - bribing OAPs with everyone else's money
 

Can pensioners cash in their pension pots yet? They could do that....

4% is really good though.

Re: Osborne's 'Pensioner bonds' - bribing OAPs with everyone else's money
 

Before tax.....

Some ISAs have upped their rates (non-taxable) to compete.

Re: Osborne's 'Pensioner bonds' - bribing OAPs with everyone else's money
 

Whole bunch of options. 4% risk free with things as they are right now? Who wouldn't find a way to liquidate some other assets to invest on that basis?

Re: Osborne's 'Pensioner bonds' - bribing OAPs with everyone else's money
 

Can I just point out the 4% interest on £20k per year, after tax, is £640 (20% tax rate) and £480 (40% tax rate) - or £12.31 / £9.23 per week.

Wrinkly boomers wouldn't be exactly living high on the hog on that extra income, will they?

Re: Osborne's 'Pensioner bonds' - bribing OAPs with everyone else's money
 

Quite - which begs the question of why George Osborne is offering up potentially ~£300 million per year of taxpayers' cash in extra interest costs over the gilt market subsidising it.

Money that should be circulating around the economy will, instead, be subsiding low-risk, subsidised investment in government bonds which makes a bit of a mockery of low interest rates in the name of encouraging riskier investment and increasing the flow of money through the economy.

The Chancellor has never been an economist but always an astute politician and this is another of his policies that is economically illiterate but most definitely a smart political move.

Whether the economy of a nation should be run based on politics rather than economics is another debate, though that's perhaps misusing the word 'debate'.

Re: Osborne's 'Pensioner bonds' - bribing OAPs with everyone else's money
 

Interest rates are puny everywhere..I'm very peeved at the Post Office who have just reduced the interest rates on the lump sum I deposited two months ago.

Re: Osborne's 'Pensioner bonds' - bribing OAPs with everyone else's money
 

I intend to cash in on some of mine in March, then sponge off the state pension at 65 in the same way that the will not work and have never worked types do with benefits now. I will still have one private,my state and full army pension :D