The seven deadly sins of NS&I Premium Bonds

Jonbvn

Good article in the Telegraph from MSE Martin pointing out how poor PB's really are.

http://www.telegraph.co.uk/finance/personalfinance/savings/7607815/The-seven-deadly-sins-of-NSandI-Premium-Bonds.html

Given how so many people hold them, I thought it was worth another thread on the subject.

BTW, Gordon Brown would like to thank all the PB holders for their extreme generosity in providing so much money to HM Treasury at such a pitiful low rate.;)

edda

Martin has a bit of a bee in his bonnet about premium bonds.

I agree with some of his comments, but notice he never mentions that they can be useful to people who lose their higher allowances (for over 65s) at the rate of £2 for every extra £1 earned.

Plus, there are other poor financial buys that aren't referred to so regularly as premium bonds (e.g. cheaper insurance - lower premiums but worse service if you have to claim; a gambling introductory offer forum on a money saving website).

Jonbvn

edda wrote: »

Martin has a bit of a bee in his bonnet about premium bonds.

I think the point is that so many people hold them, given that they are such a poor product. I concur that there are worse examples around, but they usually don't effect quite so many people.

If you read the matched-betting forum, you will be aware that it is actually not about gambling at all.

lvader

Poor compared to what, a savings account that pays 0.1% a year? Even the best savings accounts pay rubbish interest rates, you might as well put the money in premium bonds.

Jonbvn

lvader wrote: »

Poor compared to what, a savings account that pays 0.1% a year? Even the best savings accounts pay rubbish interest rates, you might as well put the money in premium bonds.

The whole point of this website is to try and help people make the most of their money. As you are well aware (or maybe not?), there are numerous accounts that pay much better than 0.1%, and on average will give you a far better return than PB's.

If you want to gamble, try Ladbrokes.

lvader

Jonbvn wrote: »

The whole point of this website is to try and help people make the most of their money. As you are well aware 9or mayb enot?), there are numerous accounts that pay much better than 0.1%, and on average will give you a far betterreturn than PB's.

If you want to gamble, try Ladbrokes.

Not many people want to keep moving their money every year to make the most of it especially since interest rates are so low anyway. Also everyone benefits from money put in PB's, banks benefit the most from regular savings accounts.

Jonbvn

lvader wrote: »

Not many people want to keep moving their money every year to make the most of it especially since interest rates are so low anyway. Also everyone benefits from money put in PB's, banks benefit the most from regular savings accounts.

Instead of PB's, try index linked savings certificates (also from NS&I). A far superior product.

JamesU

Jonbvn wrote: »

Instead of PB's, try index linked savings certificates (also from NS&I). A far superior product.

Morning all.

£6 in premium bonds invested in 1963

£50 prize 2 years ago:)

4.85% return over 47 years tax free (annual compound):)

Doubt this long term investment has kept up with inflation:(

So think I shall stay with this level of investment;)


Frustratingly, cannot do an easy comparision with £6 of index linked certificates over the same time-frame......but given the high inflation between 1970-1980, pretty sure ILCs would have been a better bet if available then.


JamesU

amcluesent

>Martin has a bit of a bee in his bonnet about premium bonds.<

Do NS&I pay for advertising on his site?

xrjtg

amcluesent wrote: »

Do NS&I pay for advertising on his site?

Nobody pays for advertising on the site. And Martin's view on Premium Bonds is negative, so not the kind of publicity that you'd want to pay for.

glider3560

xrjtg wrote: »

Nobody pays for advertising on the site.

Not strictly true. Some of the links on here are affiliate links, which pay a commission when someone clicks through and produces a lead/sale. They are marked with a *, e.g. the Moneysupermarket link at the top of this page.

Although I wouldn't put all my savings in Premium Bonds, they can be a good one to have in your "Savings Portfolio". You may (although a small chance) win a larger prize and you always get your capital back (which you don't with the National Lottery).