The launch of a Government Green Savings Bond, which will allow UK savers to invest in environmentally-focused projects with their savings, offering a fixed interest rate of 0.65% over three years, has drawn mixed reaction from industry commentators.
Steven Cameron, pensions director at Aegon, said: “The government risks sending out mixed messages with the NS&I green savings bond launch, paying a modest 0.65% interest rate over a fixed 3 year term.
Elsewhere, there’s a drive from both Government and regulators to encourage people to move any ‘excess’ cash savings, paying very little in interest into stocks and shares which offer the potential for real growth and which can also support the green agenda and the UK’s economic recovery. The messages are mixed further by the likelihood of future rises in both inflation and interest rates.”
But Tom Selby, head of retirement policy at AJ Bell, welcomed the government’s decision to provide regular communication around the use of funds.
Selby added: “While the 0.65% interest rate is unlikely to be particularly appealing, the intention to provide regular updates on how the funds are being used is innovative and may capture the public’s attention.
“With plans to require occupational pension schemes to report on alignment with the Paris agreement, might the Government lead the way by doing likewise within the Green Savings Bond’s investments?”
