Yahoo Finance Savers blocked from holding NS&I bonds in simple pension accounts
Cautious investors seeking to hold National Savings & Investment (NS&I) bonds are being told that they must either take costly financial advice or use expensive “premium” pension services.
Retired Telegraph Money reader Alan Murray wanted to move the bulk of his considerable pension into bonds issued by NS&I. Backed by the Treasury, NS&I bonds and savings accounts are considered among the safest assets you can own.
But Mr Murray was told by his several pension companies that he would either have to employ a financial adviser or switch to a “full” self-invested personal pension (Sipp), if he wanted to hold the bonds.
He said: “After recent financial tremors, the 10th anniversary of the last global recession, a world up to its eyes in trillions of pounds in debt, and a tide of pundits predicting the next downturn, I suspect I am not alone in seeking a safe haven for my pension.
“I sold out of the market and into NS&I but I now find my financial adviser is soaking up what little interest I receive through charges, so I want to go direct.”
Broadly, there are two types of Sipp. Simple Sipps are generally used by less sophisticated investors. They are low-cost, do not allow the more esoteric investments and are generally managed online.
“Full” Sipps allow you to hold a far greater range of investments – including commercial property and even intellectual property rights – but have much higher fees.
A spokesman for A J Bell, which provides Mr Murray’s Sipp, said only assets able to be traded easily online could be held within its basic account.
A J Bell’s basic Sipp is free to set up, and charges 0.25pc in annual management fees with extra fees depending on which funds are selected. Its Platinum service, where it will allow NS&I bonds, costs £425 to set up and has annual fees of £480. Hargreaves, another provider, said it did not let customers hold NS&I bonds in any of its pensions.
Aside from premium bonds – believed to be Britain’s most popular savings product – NS&I offers three types of bonds: income, guaranteed income, and guaranteed growth.
The interest paid on the income bonds rose this month, from 1pc to 1.15pc.
