Spring Budget 2024: British Savings Bond introduced to help investors ‘save for the long term’
A new British Savings Bond has been introduced at today’s Spring Budget, which will be delivered through state-owned savings bank National Savings and Investments.
In today’s fiscal event, Chancellor Jeremy Hunt said he would be making it “easier for people to save for the long term” through the introduction of the British Savings Bond, that will launch in April.
This will offer savers “a guaranteed rate, fixed for three years,” Hunt added, but did not specify what this rate would be.
The government also pointed to the rest development of allowing retail investors to buy gilts directly, adding it will continue to “examine ways in which it can support retail customers’ investment in gilts”.
Martin Lewis, founder of Moneysavingexpert, said the rate would “need to be over five per cent to be worth it”, unless it allowed for very large savings, due to the greater protections for the bond coming from National Savings and Investments.
Mark Hicks, head of active savings at Hargreaves Lansdown, described it as a “new British landmark” for the savings landscape.
“All eyes will be on the rate available, because even savers who want to buy British with their cash will not want to accept a disappointing rate in return,” said Hicks.
As the Bank of England is set to cut rates in the next few months, Hicks noted that savers “will need to think carefully whether they want to wait for this bond”, as they they may do better to secure a strong rate now.
“It’s also worth noting that most savers are currently choosing easy access and shorter-term fixed rates,” added Hicks. “Given this is a three-year bond, it will need to be a very attractive rate to inspire much interest from savers.”