Money Moral Dilemma: Should we buy Premium Bonds for the children in our families this Christmas?

LittleMissSunshine2021

There are other options which strike the balance of minimising consermism and throw away culture and giving the children something that would bring them joy at Christmas - sponsor an endangered animal or similar, pay for a subscription, butterfly kits etc. Thinking  about my 8yo, I’m not sure she would understand premium bonds, although as an adult would appreciate the gesture. 

Pollycat

MSE_Kelvin said:

This week's MoneySaver who wants advice asks...

 My partner and I don't have kids, but we've always bought small Christmas gifts for the children in our families. Yet we begrudge buying toys for consumerist and environmental reasons, and are considering getting something such as Premium Bonds for them instead. However, we're not sure whether that would be appreciated by the children or their parents.

Why not ask them?

KeithD71

I used to save with Premium Bonds, it was addictive looking forward to the draw each month and I ended up saving a lot of money. The returns; generally better than a bank account are quite bad though and I have moved into index funds. I would suggest you open a Junior Stocks and Shares ISA and put the money into a broad global index fund with low fees. Search around but one example is Vanguard's FTSE All-World UCITS ETF (https:/www.vanguardinvestor.co.uk), it's very easy to set up.

Tim11111000111

I appreciate the desire not to get cheap toys for the reasons given, but I’m not convinced premium bonds are the answer.

I don’t think younger children will appreciate the gift at all. For older children who might be in a better position to understand and appreciate a monetary gift, I think cash makes more sense - they can spend it if they want, or else save it. The way premium bonds work, if you have only a small number the chances of winning anything are vanishingly small - if you’re trying to teach savings and patience, premium bonds are not the right method, as holding on to premium bonds is just a way to lose money. Cash in an interest-paying child savings accounts or (for the long term) a S&S JISA make more sense. Plus there is the ethically dubious aspect of effectively encouraging gambling from a young age.

However I think there are plenty of other gift ideas that aren’t money and aren’t tacky toys. Nice clothes (children always need more clothes - and you can source these 2nd hand or through ethical retailers); edible treats (if the parents approve); a houseplant that the child can look after; books; treat the child to a day at the zoo (the parents will appreciate that one too); educational gits (check out the Science Museum online shop); sponsor an animal through a wildlife charity (many include a cuddly toy too); and so on. Google probably has lots more ideas!

HampshireHound

We and our immediate family all have kid 4-10y. We liaise about the budget and what sort of presents to get. We much prefer this as it means we can manage both the quantity and type/theme of presents so what they do get will really be enjoyed and appreciated.
I would also say suggest the premium bond idea with the parents and see what they think, everyone is different.

ginger_chocolate

Premium Bonds are kind of rubbish. In purely financial terms you'd be better off either just giving them the cash to spend on something they actually want, or investing it somewhere where it will actually grow, rather than just sit there losing value. In gift terms, kids probably won't really appreciate them anyway as there's nothing to "see" and the chances of winning a prize are pretty small.

You could get the kids a small, inexpensive present so they have something to unwrap on the day (with my sister's kids I find stationery, lip balms, silly socks etc go down well), then pay for the whole family to have some kind of day out as the main present.

Indigo_and_Violet

We buy for two nephews and about 4 godchildren. For the nephews and one set of godchildren we ask their parents each year. Both have quite generous sets of grandparents so their parents are generally glad for an excuse for a non-toy gift. We've bought a lot of football kit (for a small gift even some nice football socks work well) plus t-shirts/jumpers as well as colouring pens/craft supplies. Basically stuff their parents would end up buying anyway. It's a bit more expensive (about £50 per year) but for a few years we let my nephews chose a magazine subscription each year - they got regular post to remind them auntie was thinking of them and my sister got half an hours peace every two weeks when the new magazine arrived. The other two godchildren their parents are less comfortable making requests so we just get them a small book each year - something to remind them we are thinking of them but nothing to clutter the house. 

marylou2121

Some of the people on here seem to be unaware that Premium Bonds can be cashed in easily, and many children love having some savings.

Having said that I would NEVER buy Premium Bonds (or lottery tickets for that matter) for anyone.  Look at the fallout if one of the children/grandchildren had a serious win?  Whether they share or don't share it causes a big problem.

Tim11111000111

marylou2121 said:

Some of the people on here seem to be unaware that Premium Bonds can be cashed in easily, and many children love having some savings.

Having said that I would NEVER buy Premium Bonds (or lottery tickets for that matter) for anyone.  Look at the fallout if one of the children/grandchildren had a serious win?  Whether they share or don't share it causes a big problem.

I don't think anyone is unaware that you can cash in premium bonds - but if OP is giving Premium Bonds as a gift then one would assume OP's expectation is that the children will hold on to them rather than cash them in.

Yossarian83

Buy gifts from a charity shop. Some great items from books, dvds, to clothes and toys. You are then not creating anymore products whilst supporting charities.