Premium bonds 12 May 2021 at 7:01AM in Green & ethical MoneySaving 5 replies 161 views

CGX

Hi all, I hope everyone is safe and well. 

I have some money invested in NSA&I premium bonds, but I’m at a loss in finding out what they’re invested in. Are they just a giant bulk savings job with all investors money in one safe pot? Or are they invested in ‘things’, if so - what ‘things’?! And how do they make a profit for the company? I’m very concerned that I’m inadvertently, possibly (rarely!) profiting from unethical practices.....
Please help!!

CGX

*Correction - NS&I! 

Reed_Richards

Your money is not invested as such, it is loaned to the Government.  You'll have to decide for yourself whether their practices are ethical.

Cardew

The Government has Income and Expenditure. For the past 40 years - with the exception of a couple of years - expenditure has exceeded income. To meet that gap the Government borrow money from a variety of  sources, Premium Bonds being one such source.(currently over £200 billion)

The interest on borrowing, or prizes in the case of Premium Bonds, is part of their expediture.

mggftz30

They are really a savings account that do not earn you any interest but the bonds are entered into a prize draw each month (like a lottery) with a chance of winning a tax free sum. 

CGX

Hmmmmm. As I suspected. Suspect.