The 1 year bonds, first announced in the 2014 Budget, will pay an annual interest rate of 2.8%, and the 3 year bonds will pay 4%, higher than any others currently offered in the market.
The bonds have an investment limit of £10,000 per bond per person, and are estimated to help around 1 million pensioners. They will be available from January 2015 and investors can hold bonds jointly, allowing a couple to hold a maximum of £40,000.
Chancellor of the Exchequer, George Osborne said:
"A key part of our long term economic plan is to support savers and boost hardworking peoples’ financial security at all stages of life.
"That’s why the government is introducing savings bonds for people aged 65 and over, and why we’re confirming today that these bonds will pay the best available interest rates. They will give hundreds of thousands of older savers the certainty and comfort of a good return over the life of their investment."
