With interest rates for savers at an all time low many are looking for alternatives for their savings and one option could be ‘local authority green bonds‘, investing in the the future health of our planet whilst gaining decent returns.
Savings accounts no longer offering a good rate of return
Many traditional bank and building society savings account interest rates are as low as 0.01%.
Investing in the stock market is not an option either as the markets and the pound struggle with the impeding Brexit break away day and possible ‘no deal’ and the economic downturn created by the Global Corona Virus.
When I sold my first house I split the money into various investment options and it was the Bonds that I chose that out performed everything. Investments offer high or low risk options with pro’s and con’s to both, it is somewhere in the middle that investors can find Government-backed green bonds.
NS&I will be cutting their interest rates in November
Money Savings Expert has advised that the NS&I Easy Access savings rate is going down to 0.01% and the prize draw will be down to 1%. The number of prizes is expected to drop from September 2020, 3,856,040 prizes were won – but this is expected to drop to 2,850,256 in December 2020 when the prize rate is reduced.
Investing in National Savings accounts also lends money directly to the Government who then invest in projects such as HS2. Read the Annual Report for NS&I 2019
Some of the Governments 125 projects worth £448billion you could be funding with NS&I savings:
- 5G Testbeds and Trials – £200 million
- EU Exit and transition
- Heathrow expansion program
- Smart motorways
You could fund your local councils directly, rather than central Government projects which could benefit your community and the area your live in.
Governments can also charge companies to hold bonds, this in turn would increase the price of the Bonds.
The Bank of England interest rates
The Bank of England interest rate is currently 0.1% as of today, 9th October 2020 and not expected to change any time soon.
There is a real danger that the low interest rates may push many to withdraw their money from the system altogether and hold onto it, this mass withdrawal of money from the system will impact all of us. Money in an account, however small is invested, if there is no money in accounts then there is less to invest for businesses.
What are Local Authority Green Bonds
With job insecurity on top of everything else, people really need a ‘safe heaven’ for their hard earned savings and need to look at other options.
Local authority green bonds use savers cash to invest in local renewable energy infrastructure, with returns of 1.2 per cent on offer to those prepared to fix for 5 years.
These investments were introduced by Bruce Davis, the co-founder of Abundance Investment, that has identified a way for investors to invest in renewable and green projects that are safer than shares.
To “supercharge the green economy” these Green Bonds are predicted to raise £3 million towards local projects.
Source: This is money
Regulated by the Financial Conduct Authority
These bonds have been fully regulated by the Financial Conduct Authority and guarantee to pay a 1.2 per cent interest over a five year term. These bonds are considered to be low risk as backed by local councils issuing them, currently West Berkshire and Warrington with others in the pipeline.
These bonds can also be sold on during the term to others.
Local Authority report on investment in Local Energy Projects
UK100 group of local authority report Accelerating the Rate of Investment in Local Energy Projects energy projects could create £100bn of investment and create 300,000 jobs.