The U.K. government is offering bonds to its citizens aged over 65 at above-market interest rates, and the issue has proved to be a resounding success so far.
More than 1 billion pounds ($1.52 billion) of the pensioner bonds have been sold to more than 110,000 elderly investors in just the first two days of the offering. Up to 10 billion pounds are being offered.
Demand was so strong that the government web site selling them crashed Thursday morning.
This is "the biggest opening sales of any retail financial product in Britain's modern history," Britain's Chancellor of the Exchequer George Osborne (equivalent to the U.S. Treasury secretary), said
according to BBC News.
This "shows what an appetite there is for an economic plan that rewards savers," he said, calling the bonds "hugely successful."
Sylvia Waycot, of Moneyfacts.co.uk,
told the (London) Daily Mail: 'this bond is going to be gone in days if not sooner."
The bonds include one-year paper with a pre-tax yield of 2.8 percent, and three-year paper with a pre-tax yield of 4 percent. The best rates available in the open market are 1.85 percent for one-year bonds and 2.5 percent for three-year bonds, financial advisers told BBC.
Not everyone is pleased with the new bonds.
"They're not only taxpayer-guaranteed investments for the already relatively well-off, but leave the government borrowing at above-market rates," Andy Silvester, campaign manager of the TaxPayers' Alliance, told BBC.
"Too often during this parliament it has seemed as if austerity stops at 65. It's almost as if pensioners are more likely to vote."
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