The 5% p.a. fixed interest bonds are Dozens’ first financial innovation . They were designed to introduce customers to investment products, and reward them for putting aside small amounts on a regular basis and setting it aside for a year.
And they’ve been a great success! Over the last two years, we’ve had 5,530 bids received for the bonds, of which 4,211 were successful. Over £3.6m worth of bonds have been issued, over £1.8m have already matured, paying out over £120,000 in interest to customers like you.
Now we have some new plans.
One of the limitations of the bonds is that, due to the cost of funding them, a cost we bear as a business, we have to limit the amount available each month. We designed a reverse bidding system which allowed the funds to be spread across as many people as possible. However, at a fixed 5% p.a., a rate unheard of in the market, the funds could still be distributed only so far. And, while this bidding system made it fairer, it added time and complexity to the purchase process, which naturally became a barrier for some customers. The bonds are fantastic at delivering returns, but not quite as financially inclusive as we’d like.
While we remain committed to differentiating the Dozens proposition through financial product innovation, the internal infrastructure investment – both in terms of time and costs – required to run the bonds, is not yielding as wide an impact as we would like. We believe, if we used those same resources for other financial products, we can aim for even more successful, and more inclusive financial product launches in 2022.
Cue… a new 1% product, that will allow us to bring returns to more people . It will be simpler, as it will have no bidding system, and the 1% p.a. will be on amounts up to £5,200 – so a potential regular earning of £1 a week.
This does mean that from today there will be no new issuances of the Dozens Savings Plc 5% p.a. fixed interest bonds. We want to stress, that if you currently hold bonds these will not be affected at all. Your bonds will continue, and your interest will continue to be paid monthly.
Finally we’d like to thank each and every bondholder for your amazing trust in this unique financial product, our team and mission , even through, what have been universally challenging times. We will be coming back to you soon with our new, simple, financially inclusive product – the 1%!