NS&I Increases Rates – A Safe Option if You’re Holding Significant Cash in Retirement

If you're holding larger sums of cash—perhaps from downsizing, an inheritance, or selling a business—you might be wondering where to place it securely while still earning a fair return.

NS&I has just increased rates on its 1-Year Savings Bonds, now offering 4.18% gross/AER if you choose to have interest paid at the end (Growth Bond), or 4.11% gross monthly (4.18% AER) if you prefer regular income (Income Bond). These bonds are fully backed by the UK Government, offering peace of mind that your capital is completely safe—especially if you're beyond the usual £85,000 bank protection limit.

You can invest from £500 up to £1 million, making this a useful home for larger balances that don’t fit into ISAs.

While ISAs remain an excellent, first choice tool for long-term tax-free saving, the annual £20,000 allowance may not go far enough if you’re managing larger cash reserves. NS&I bonds can sit alongside your ISA strategy giving you a fixed, guaranteed return for 12 months while keeping your capital fully protected.

These bonds are ideal if:

• You need to retain cash as part of your investment strategy to counter-balance the inherent risk of investing, and have used your ISA allowance

• You want a simple, secure place to hold money while making broader retirement decisions

Just keep in mind: interest is taxable, and your money is locked in for a year.