Financial numpty re savings

Beenie

I am a basic rate tax payer and want to save £300 per month in the most efficient way. I am 55 years old and will have a modest works pension at retirement.

My question is this: is it better to buy premium bonds or put the money in a bank/building society?

(I have heard about ISAs but don't know what they are and so am reluctant to commit money to something I don't understand).

Jonbvn

Read Martin's guides first.
http://www.moneysavingexpert.com/savings/savings-accounts-best-interest#instant

redpete

ISAs don't have to be complicated. Think of Cash ISAs as normal savings accounts but you don't pay tax on the interest you get paid.

Personally I wouldn't bother with Premium Bonds but look for the best interest rate in a bank or building society. National Savings Index Linked accounts are worth looking at - they guarantee a return above inflation. Otherwise look for the highest interest rate - it will be worth looking at Regular Saver accounts although these might have a monthly limit lower than your £300 per month; consider splitting across more than one account.