Granny takes a dip

PENSIONERS tempted to invest their money in a National Savings 'granny' bond can now often get better rates of return from a range of guaranteed monthly income bonds.

For those pensioners who pay tax, a seven-year Consolidated Life bond pays 5.8 per cent net, the equivalent of 7.73 per cent gross, on investments above pounds 2,000. This compares with the 7 per cent gross on the National Savings bond.

Those with sums above pounds 10,000 can now get 6.16 per cent net, equivalent to 8.21 gross, in a five-year General Portfolio bond. Sums above pounds 20,000 qualify for 6.28 per cent, the same as 8.37 gross.

These rates can be improved slightly through Baronworth Investment Services, an Ilford-based firm of financial advisers, which offers a commission-sharing deal to its clients.

Cheltenham & Gloucester has cut the rates on both its onshore and offshore investment accounts by 0.25 per cent. The rates on its Instant 7 account now vary from 5.45 to 6.75 per cent gross; previously the rates varied from 5.7 to 7 per cent.

The rate on the London share account has dropped from 5.7 to 5.45 per cent.

----------------------------------------------------------------- SIX OF THE BEST ----------------------------------------------------------------- Savings ----------------------------------------------------------------- Type Account Term 0% 25% 40% Min pounds GIB Consolidated Life 7 years 6.90 6.90 5.87 2,000 B Soc Northern Rock Instant 6.75 5.06 4.05 25,000 Tessa Hinkley & Rugby 5 years 7.60 7.60 7.60 3,000 Compounded annual rate except for GIB (guaranteed income bond) ----------------------------------------------------------------- Source: Chase De Vere 071-404 5766 ----------------------------------------------------------------- Mortgages ----------------------------------------------------------------- Type Source Deal Variable Northern Rock* 2.99% discounted rate on 90% loans Fixed Bristol & West 7.3% 5yrs on 80% loans Capped Royal Bank of Scotland 7.89% 5yrs on 80% loans ----------------------------------------------------------------- *Arrangement fee of pounds 150. Household insurance through Northern Rock. ----------------------------------------------------------------- Source: John Charcol 071-611 7000 -----------------------------------------------------------------