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Non-NS&I 'Pensioner Bonds' put your capital at risk
Elderly people are being encouraged to put their money into a non-government backed investment product by adverts suggesting'Pensioner Bonds Are Back'.
TheFixed Income Pensioner Bonds, launched by Basset & Gold, offer projected annual returns of up to 4.32%. But this product should not be confused with the risk-free government-backed bonds offered to over-65s by National Savings & Investments (NS&I) in 2015, which were also commonly referred to as 'Pensioner Bonds'.
Unlike the NS&I bonds, the Basset & Gold products do not offer investors guaranteed returns and their capital may be at risk.
NS&I's 'Pensioner Bonds' (formally known as 65+ Guaranteed Growth Bonds) were the best-selling financial product in British history.
Addressing the question of potential confusion between the products, a Basset & Gold spokesperson said: 'Besides both being structured as bonds offered exclusively to the pensioners' investor segment, they are significantly different and do not compete with each other.
'As far as we are aware, the Basset & Gold pensioner bonds are the only pensioner bonds on offer at present and do not cause any confusion.'
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Are Basset & Gold's Pensioner Bonds any good?
Basset & Gold offers a range of bonds to investors. Investors' money is lent to companies and individuals, meaning returns are not guaranteed.
You can invest between £1,000 and £500,000 in Basset & Gold's Pensioner Bonds. There are no fees and you can receive interest payments monthly or annually.
The projected annual return of4.32% is far better than any rates you can earn with a one-year fixed-rate cash Isa or savings account. But the major catch is that your capital is at risk, meaning the value of your investment could go down as well as up.
There is no information on the Basset & Gold website about the historic performance of these bonds, nor where your money would be invested(but they do claim on their website that no Basset & Gold investor has ever lost money).
Basset & Gold is part of the Financial Services Compensation Scheme, meaning up to £50,000 of your money is protected should the company go bust.
Find out more:are you ready to invest? - our beginner's guide
How to beat inflation without risking your money
With CPI inflation rising to a five-and-a-half year high of 3% in September, savers might be tempted to put their money into riskier investments to achieve healthy returns.
That might not be necessary though. Although there are no traditional savings accounts or cash Isas offering returns above 3%, there other ways to achieve inflation-busting returns at no risk to your capital.
Regular savings accountsoffer returns of up to 5% AER, although they do come with a maximum monthly deposit. The Which? Money Compare regular savings account tables let you search dozens of accounts to find a great savings rate based on quality of service as well as cost and benefits.
Current accountshave been offering inflation-busting returns on small balances for some time, although currently only the Nationwide FlexDirect account has an interest rate higher than 3%. Our current account tables make it simple to find the best account for your needs.
