Premium Bond

cottonsocks1970

Please do not buy premium bonds( NSI and sandi) for children under 18, my son turned 18 in February and having no returns on them I have told him to cash out, Well that was beginning of February everything has to be done via download paperwork, which we have submitted countless times, and many phone calls, here we are end of May and paperwork is back to the beginning, absolutely fuming NSI and Sandi still have the money accumulating in there account and my son is no further down the line that we were in February, 

Mark_d

The advantage of premium bonds is that that the prizes are tax free and you're supposed to get easy access to the cash.  You money is also 100% safe.  By investing early, you don't get any extra allowance.  The max you can invest is £50k.

If I was investing for a child with the intention of them being in a good financial position by the age of 18, I would contribute to S&S ISAs:
https://www.hl.co.uk/investment-services/junior-isa

refluxer

cottonsocks1970 said:

Please do not buy premium bonds( NSI and sandi) for children under 18, my son turned 18 in February and having no returns on them I have told him to cash out, Well that was beginning of February everything has to be done via download paperwork, which we have submitted countless times, and many phone calls, here we are end of May and paperwork is back to the beginning, absolutely fuming NSI and Sandi still have the money accumulating in there account and my son is no further down the line that we were in February, 

When children with premium bonds turn 18, they get the opportunity to register for an NS&I online account to get access to them as an adult - did you (he) not do this ? Once the account is set up, selling them online is straight forward and won't involve paper forms.

Gers

Strange - two new members each posting a single comment against Premium Bonds!  Do I need a tin hat?

https://forums.moneysavingexpert.com/discussion/6530208/cashed-out#latest

wiseonesomeofthetime

Gers said:

Strange - two new members each posting a single comment against Premium Bonds!  Do I need a tin hat?

https://forums.moneysavingexpert.com/discussion/6530208/cashed-out#latest

Not at all. This one is a legitimate issue that I have encountered this year, though slightly different.

Purchased premium bonds for my son in 2010, then totally forgot about them until he gets a letter saying he's 16 and can now access his bonds. I check my NS&I dashboard and sure enough they have gone.

Now he can only access them by downloading a form and jumping through hoops. If I had remembered them, we could have cashed them in before he hit 16.

It's only £100 and zero winnings in the 14 years of activity, not surprised by that.

The only good thing about this old-fashioned approach is that he hasn't had chance to spend it yet (though, in his head, has done so several times already lol)

elkiedee

You can only buy Premium Bonds for children under 16 - at 16 or 17 your child would now have to open their own account or be helped to do so. I was going to get them a small amount each on the basis that it's a little flutter, but we can get the money back. For small amounts of PBs, less than a few thousand, the odds of any winnings aren't great, and if growing savings and/or getting an income are more important and people with low or no taxable income, I think it's not the best thing but it's a low risk flutter as it's only conventional savings interest rates I'm missing out on (and I still have far more money in ISAs and other cash savings than PBs).

Albermarle

 For small amounts of PBs, less than a few thousand, the odds of any winnings aren't great,

Regardless of how many PB's you have, the average odds of winning = the published prize rate.

Clearly with less bonds you will win less prizes. However the % return will be the same on average.

The difference with having less bonds is that you are more likely to get a bigger or smaller % than average. The more bonds you have the more likely your % return will be in line with the average. 

daveyjp

Daughter has a few thousand bought for her as she grew up.

Despite all the paperwork we have the log on isn't recognised and it has taken 6 weeks for the new log on passwords to arrive. Advice was to call the helpline, she did so and standard response was to log in online.  

She's had a few wins over the years, including £100 last month, but she wants to cash in, its useful money for a LISA investment.

This is now becoming painful.

Temporary password entered and advised they need to call her on the telephone number provided.  Unfortunately this number on the account is no longer correct.

Click on 'number is no longer my contact number' to try and change it and advice is to call and obtain a temporary password to log on!  This is the reason she called for the first temporary password!

Rakushun

daveyjp said:

Daughter has a few thousand bought for her as she grew up.

Despite all the paperwork we have the log on isn't recognised and it has taken 6 weeks for the new log on passwords to arrive. Advice was to call the helpline, she did so and standard response was to log in online.  

She's had a few wins over the years, including £100 last month, but she wants to cash in, it’s useful money for a LISA investment.

Hi,

I don’t know if the cash out to LISA has happened but I hope it hasn’t.

LISA (at least when I got one) had the benefit of tax free top ups yes, but should you need to withdraw you would be penalised as it is percentage of the new total deducted rather than just the original top up that was added.

Compounding/investing works best the younger you start. 

The NS&I is tax free, safe and accessible as needed (eg for home emergencies like a new roof). No investment risk taking but it can compound the same way. 

So if anyone is fortunate enough to be able to have several thousand in the account, and be getting draws, they would be best served by setting a regular deposit (no matter how small) and setting it to auto reinvest any ‘prizes’ and forgetting about it.

BW

masonic

Rakushun said:

Compounding/investing works best the younger you start. 

The NS&I is tax free, safe and accessible as needed (eg for home emergencies like a new roof). No investment risk taking but it can compound the same way. 

So if anyone is fortunate enough to be able to have several thousand in the account, and be getting draws, they would be best served by setting a regular deposit (no matter how small) and setting it to auto reinvest any ‘prizes’ and forgetting about it.

BW

It can compound, but only if you win. The smaller the starting holding, the less likely that is. Whereas with conventional savings, you are guaranteed compound interest at a rate usually competitive with premium bonds with any starting balance.

Though if you have a long enough time horizon and no requirement to access the money, investments are the surest way to secure a compound return that keeps ahead of inflation.

Also worth considering that someone saving into a LISA as a means to buy their first home should generally prioritise that goal, and is unlikely to need to pay for a new roof before using their LISA