A government-backed pensioner bond offering competitive rates of up to 4% interest is to be offered for a further three months, George Osborne has said.

The UK chancellor told the BBC he was extending the deadline for over 65s to apply to May since the idea had proved "enormously popular and successful".

More than £1bn in bonds were sold in the first two days of the scheme and 600,000 people have now signed up.

National Savings and Investments (NS&I) are offering up to £10bn in bonds.

However, Mr Osborne said he expected this figure to be extended to £15bn and the deadline moved until after 15 May, a week after the general election.

Mr Osborne told the Andrew Marr show that the bond - on offer to the over 65s - had been "the most successful saving product this country had ever seen", with 110,000 pensioners signing up in the first two days after they went on sale in January.

"We will guarantee that it remains on sale for a further three months because this government backs savers and supports people who do the right thing," he said.
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Analysis

We knew these pensioner bonds would be popular but few expected them to be this popular.

Their arrival three weeks ago has flushed out billions of pounds of cash owned by older people.

They've found a safe new place to park their money with incredibly generous rates of interest. The original ceiling of £10bn has been scrapped simply because the chancellor and his Lib Dem deputy Danny Alexander didn't want to risk the ire of such a key voting demographic who might have missed out on such a lucrative opportunity.

The fact that the newly-created window for investing in pensioner bonds closes not long after the general election polls do is a happy coincidence.

Critics will say that ordinary working-age taxpayers will be subsidising an often wealthy group of pensioners whose homes have multiplied in value and whose company pensions are far more generous than will be the case when Generation X or Y retires.

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