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British Savings Bonds

ended 04. April 2024

A journalist at the Daily Express is writing a story about the launch of the British Savings Bonds: https://www.nsandi.com/british-savings-bonds

He'd like answers to the following questions:
- Who would the bonds suit?
- What are they key advantages of this account vs other three-year bonds, particularly as you can get a better rate elsewhere?
- Will the bonds provide a boost for the economy?

3 responses from the Newspage community

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Ross Lacey
Director & Independent Financial Adviser at Fairview Financial Management
The name is a bit of a gimmick and there are better rates available elsewhere. These may be something to consider where FSCS compensation limits are already maxed out at other banks. Locking away the money for 3 years is also not something to do without serious consideration. Cash is great for short term expenses and liquidity but by locking it away, although the rate may be marginally higher than an easy access account, you lose the flexibility and whole reason for keeping cash in the first place!
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Gary Bush
Financial Adviser at MortgageShop.com
The British Savings Bonds announced by the Chancellor in the Spring Budget are a good incentive to get people saving, however, the rates don't exactly set the world alight - which is common for National Savings. Having your money 100% guaranteed, however, in times like these, is a comforting factor that these government investments provide - there is no £85,000 cap with NS&I all amounts are covered. With these new bonds having a minimum contribution of only £500 it makes it flexible enough for most uses where you have a target expense in 3 years and no need for access to the monies - the biggest factor to be aware of is that it is for internet transactions only, this is a no phone support product.
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Joshua Gerstler
Chartered Financial Planner at The Orchard Practice
Jeremy Hunt said he will make it easier for people to save for the long term with a new British Savings Bond, delivered through National Savings and Investments, offering savers a guaranteed rate, fixed for 3 years.

There is nothing here that makes it any easier than it already is to save. Go online and you can find plenty of accounts which will allow you to save for three years.

Furthermore, we vary rarely want anyone to save for the long term. Over the long term it is more than likely that you will be better off investing rather than saving. Savings do not provide a good return over the long term.

And when did 3 years become the long term? In financial advice, anything less than 5 years is not normally considered long term.

It is called a British Savings Bond as it is a savings bond available in Britain.