Hint at return of pensioner bonds to give savers lifeline

THERESA May could bring back pensioner bonds for all ages to help long-suffering savers, it emerged last night. Former pensions minister Baroness Altmann suggested Government-backed bonds with higher interest rates would be a boost to those who have endured rock-bottom returns for years.

It is understood other plans to help savers may include tax breaks, such as ripping up savings limits on Isas.

A source told the Mail that industry experts have been asked to present their ideas to the Treasury before the end of the month.

Mrs May hinted in her conference speech on Wednesday that she would introduce policies to help savers after quantitative easing and the interest-rate cut had ‘bad side effects’. Yesterday, Baroness

‘Dangerous policy of printing money’

Altmann agreed the ‘dangerous’ policy of printing money had ‘turned the world of savings upside down’.

She said: ‘There are negative returns on some company and Government bonds at the moment, which is bonkers.

‘It’s clearly unsustainable and makes no sense from a long-term perspective.’

On ways to help savers, she added: ‘What the Government could think of doing is bringing back special savings bonds.

‘All savers have been hit, not just the over-65s.’

High-interest fixed-term bonds were issued from January to May last year for the over-65s and were considered the most successful financial product for years. The bonds offered 2.8 per cent interest for one year and 4 per cent for three years – almost double the rates typically offered on the high street.

In the first few months more than 610,000 savers invested £7.5billion.

David Dalton-Brown, of the Tax Incentivised Savings Association, which is frequently involved in Treasury discussions of new policies, suggested a range of options could be on the table.

He said: ‘We believe the key areas the Government should be focusing on are increasing the amount younger savers are putting into workplace pensions, making the new Lifetime Isa work better for self-employed workers and helping savers make more use of the capital tied up in their houses in retirement.’

Iain Anderson, a Government policy expert, said a ‘flurry of new savings deals’ would help fund new projects. He added: ‘In order to fund three years of big infrastructure projects such as building more houses, the Chancellor could well find it attractive to launch a flurry of new savings deals, such as “granny bonds” with sweetened interest rates or NS&I products.’