Premium Bonds

Mintyrose

We have flu

oldernonethewiser

Premium Bonds is just a form of gambling where you don't lose your intial stake (although it will be worth a lot less in ten years) certainly not a means of building up your finances, unless you are lucky.

Have you used all your ISA allowance?

Albermarle

Mintyrose said:

oldernonethewiser said:

Premium Bonds is just a form of gambling where you don't lose your intial stake (although it will be worth a lot less in ten years) certainly not a means of building up your finances, unless you are lucky.

Have you used all your ISA allowance?

No we haven’t, don’t really understand how they work? 😬, but willing to learn 😁
@oldernonethewiser

With Premium Bonds, there is a fixed number of prizes each month.
You will get a different number of prizes each month, occasionally none at all.
If you have the full £50K, over the year you can expect an average return around 3.8 % tax free. This is a bit less than you get in a savings account. However with PB's there is a very small chance of winning a bigger prize. The chance of winning a Million is so small you can forget about it.

A cash ISA is just a savings account that is protected from tax .

Savings - All Guides - MoneySavingExpert

I do not think the choice between an ISA and PB's is going to make any difference really to your predicament.
You need to save as much as possible each month and both of you working could help?

eskbanker

Mintyrose said:

We have full amount in PBs and just started on a 2nd in other halves name, we rent , are in our 50s and only one of us works, and fingers crossed will do so until retirement in 10 years, time is running out for us, we obviously want our own place, to avoid having to pay rent and lose money till we die 😳, would it be better to put money into savings account and lock it away, or base all our hopes and dreams on winning just that bit more to get us our own place, we live in a holiday resort where prices are high and choices are few , thank 

Mintyrose said:
...in the meanwhile getting NI credits for my future pension...

While many people don't have the luxury of a £50K+ savings pot, it's unlikely to be transformative in terms of getting you onto the housing ladder unless you have sufficient permanent income to sustain a sizable mortgage throughout the term, so I suspect it's probably going to be more realistic to abandon that particular dream, but what are your pension provisions (for each of you) beyond the state pension?

eskbanker

Mintyrose said:

@eskbanker , the PBs are our everything 🤷‍♀️ other than an inheritance at some point of half a house, long term
plan is to hopefully buy somewhere and having no rent to pay, manage ok, as 2 pensions short term would be equal to the one wage we are on now 
oh it’s not a luxury, it’s years of going without and not living, we pay over £600 a month in rent, so a home would be a huge saving and investment for our kids

I fear you're missing my point!  My reference to 'luxury' was simply an observation that many people don't have a chunky savings pot, so you are in a fortunate position relative to some (the means by which it was achieved is irrelevant to this), but in itself it may not be sufficient to pursue the dream of home ownership if properties in your area are expensive, you don't wish to move, and only currently have one income between you.  You mention "long term plan is to hopefully buy somewhere" but I understood the purpose of your post as being to try to ascertain how viable that aspiration is, which ought to be based on something more tangible than hope, but much depends on your wider financial circumstances, hence the (not really answered) question about whether both your pre- and post-retirement incomes are likely to support a mortgage.

eskbanker

Mintyrose said:

eskbanker said:

Mintyrose said:

@eskbanker , the PBs are our everything 🤷‍♀️ other than an inheritance at some point of half a house, long term
plan is to hopefully buy somewhere and having no rent to pay, manage ok, as 2 pensions short term would be equal to the one wage we are on now 
oh it’s not a luxury, it’s years of going without and not living, we pay over £600 a month in rent, so a home would be a huge saving and investment for our kids

I fear you're missing my point!  My reference to 'luxury' was simply an observation that many people don't have a chunky savings pot, so you are in a fortunate position relative to some (the means by which it was achieved is irrelevant to this), but in itself it may not be sufficient to pursue the dream of home ownership if properties in your area are expensive, you don't wish to move, and only currently have one income between you.  You mention "long term plan is to hopefully buy somewhere" but I understood the purpose of your post as being to try to ascertain how viable that aspiration is, which ought to be based on something more tangible than hope, but much depends on your wider financial circumstances, hence the (not really answered) question about whether both your pre- and post-retirement incomes are likely to support a mortgage.

@es@eskbanker hoping to have enough in the pot to more or less buy outright or have a tiny mortgage, but have it paid of by retirement, so it’s basically a 12 year plan 

Mintyrose said:

We have full amount in PBs and just started on a 2nd in other halves name, 

[...]

we live in a holiday resort where prices are high

I'm struggling to understand your situation here!  Your OP gave the impression that you had slightly more than £50K to your name and that property prices are high (with a hope of a big win on premium bonds to close that significant gap), but your more recent post implies that you can nearly afford to buy one?  I appreciate that, despite the anonymity of a web forum, some are reluctant to divulge too many details of their finances, but drip-feeding pertinent information is a surefire way of getting sub-optimal advice....

eskbanker

Mintyrose said:

Oh no we can’t nearly afford one at all! I will in the future inherit half a house, that has a caveat of my brother being able to continue living there on death if my parent for up to 2 years, as he lives there now as he is divorced and lived there for 15 years as he can’t afford his own place 😬 which he really should now as living 15 years rent free, but that’s another story, 😅 anyway sometime, maybe I will have a better amount to buy, the question was, is it better to keep it in bonds or move it to savings/isa? To bump it up, so we have more choice, and able to cover fees etc, where we are a dump starts at 150k 🤷‍♀️ @eskbanker

I imagine that you'll struggle to do so, but what would really help your planning is to have some realistic expectation of timescales - if you're likely to be buying within, say, the next five years, then chances are that keeping your money in cash savings will be best (the difference between standard taxable accounts and ISAs or premium bonds being relatively minor), but if it's likely to be longer than that then investing may be more appropriate.

If your hopes of buying are predicated on selling half an inherited house, are there any health or other issues that would give any indication of when that might happen, i.e. do you have any reason to suspect that you'd be inheriting before your retirement, for example?  Obviously having the value of half a house tied up in a property that can't be sold for at least two years means that you wouldn't be able to benefit from it during that period anyway....

Mintyrose

eskbanker said:

Mintyrose said:

Oh no we can’t nearly afford one at all! I will in the future inherit half a house, that has a caveat of my brother being able to continue living there on death if my parent for up to 2 years, as he lives there now as he is divorced and lived there for 15 years as he can’t afford his own place 😬 which he really should now as living 15 years rent free, but that’s another story, 😅 anyway sometime, maybe I will have a better amount to buy, the question was, is it better to keep it in bonds or move it to savings/isa? To bump it up, so we have more choice, and able to cover fees etc, where we are a dump starts at 150k 🤷‍♀️ @eskbanker

I imagine that you'll struggle to do so, but what would really help your planning is to have some realistic expectation of timescales - if you're likely to be buying within, say, the next five years, then chances are that keeping your money in cash savings will be best (the difference between standard taxable accounts and ISAs or premium bonds being relatively minor), but if it's likely to be longer than that then investing may be more appropriate.

If your hopes of buying are predicated on selling half an inherited house, are there any health or other issues that would give any indication of when that might happen, i.e. do you have any reason to suspect that you'd be inheriting before your retirement, for example?  Obviously having the value of half a house tied up in a property that can't be sold for at least two years means that you wouldn't be able to benefit from it during that period anyway....

@eskbanker parent has heart failure and is 85, so who knows 🤷‍♀️ we have 11 years until retirement, hopefully parent stays well as long as possible obviously, but the fact of me paying over £600 a month rent, while sibling leaves rent free now, and for up to 2 years is slightly annoying, they will be in charge of all bills etc, maintainance in that time, but will be left enough cash to do that, I’m losing cash all the time with renting , potentially more than £72k =  Ongoing situation  x 10 years, not counting rent raising yearly 

eskbanker

Mintyrose said:

eskbanker said:

Mintyrose said:

Oh no we can’t nearly afford one at all! I will in the future inherit half a house, that has a caveat of my brother being able to continue living there on death if my parent for up to 2 years, as he lives there now as he is divorced and lived there for 15 years as he can’t afford his own place 😬 which he really should now as living 15 years rent free, but that’s another story, 😅 anyway sometime, maybe I will have a better amount to buy, the question was, is it better to keep it in bonds or move it to savings/isa? To bump it up, so we have more choice, and able to cover fees etc, where we are a dump starts at 150k 🤷‍♀️ @eskbanker

I imagine that you'll struggle to do so, but what would really help your planning is to have some realistic expectation of timescales - if you're likely to be buying within, say, the next five years, then chances are that keeping your money in cash savings will be best (the difference between standard taxable accounts and ISAs or premium bonds being relatively minor), but if it's likely to be longer than that then investing may be more appropriate.

If your hopes of buying are predicated on selling half an inherited house, are there any health or other issues that would give any indication of when that might happen, i.e. do you have any reason to suspect that you'd be inheriting before your retirement, for example?  Obviously having the value of half a house tied up in a property that can't be sold for at least two years means that you wouldn't be able to benefit from it during that period anyway....

@eskbanker parent has heart failure and is 85, so who knows 🤷‍♀️ we have 11 years until retirement, hopefully parent stays well as long as possible obviously, but the fact of me paying over £600 a month rent, while sibling leaves rent free now, and for up to 2 years is slightly annoying, they will be in charge of all bills etc, maintainance in that time, but will be left enough cash to do that, I’m losing cash all the time with renting , potentially more than £72k =  Ongoing situation  x 10 years, not counting rent raising yearly 

Seems to me that you'd probably benefit from focusing on what you can control, rather than wasting emotional energy on resenting the fact that you're paying rent and your brother isn't!  I get that the sooner you can buy the less rental money you 'lose', but festering about that doesn't actually make anything happen any faster, so dispassionately concentrating on what's best to do with the money that you do have seems the most productive avenue.

PixelPound

Mintyrose said:

eskbanker said:

Mintyrose said:

Oh no we can’t nearly afford one at all! I will in the future inherit half a house, that has a caveat of my brother being able to continue living there on death if my parent for up to 2 years, as he lives there now as he is divorced and lived there for 15 years as he can’t afford his own place 😬 which he really should now as living 15 years rent free, but that’s another story, 😅 anyway sometime, maybe I will have a better amount to buy, the question was, is it better to keep it in bonds or move it to savings/isa? To bump it up, so we have more choice, and able to cover fees etc, where we are a dump starts at 150k 🤷‍♀️ @eskbanker

I imagine that you'll struggle to do so, but what would really help your planning is to have some realistic expectation of timescales - if you're likely to be buying within, say, the next five years, then chances are that keeping your money in cash savings will be best (the difference between standard taxable accounts and ISAs or premium bonds being relatively minor), but if it's likely to be longer than that then investing may be more appropriate.

If your hopes of buying are predicated on selling half an inherited house, are there any health or other issues that would give any indication of when that might happen, i.e. do you have any reason to suspect that you'd be inheriting before your retirement, for example?  Obviously having the value of half a house tied up in a property that can't be sold for at least two years means that you wouldn't be able to benefit from it during that period anyway....

@eskbanker parent has heart failure and is 85, so who knows 🤷‍♀️ we have 11 years until retirement, hopefully parent stays well as long as possible obviously, but the fact of me paying over £600 a month rent, while sibling leaves rent free now, and for up to 2 years is slightly annoying, they will be in charge of all bills etc, maintainance in that time, but will be left enough cash to do that, I’m losing cash all the time with renting , potentially more than £72k =  Ongoing situation  x 10 years, not counting rent raising yearly 

Whether your parent charges your sibling rent is a matter between them. I hope your parent has a will sorted out tightly as I can see probate being contentious with possibly the sibling being told the rent they don't pay is part of their settlement. Money definitely does divide families.

On the savings, it depends how much and when you want it. If the house sale is going to be part of your planning and on no circumstances will most of your savings be used before, then a bond sounds a good idea. Though will you be going over the threshold on interest for it to be taxed. ISA's are then useful if so. Bonds are useful for knowing what rate you get and not influenced by BOE rate changes. 

eskbanker

nic_c said:

On the savings, it depends how much and when you want it. If the house sale is going to be part of your planning and on no circumstances will most of your savings be used before, then a bond sounds a good idea. Though will you be going over the threshold on interest for it to be taxed. ISA's are then useful if so. Bonds are useful for knowing what rate you get and not influenced by BOE rate changes. 

Just to be clear, the term 'bond' is ambiguous, so you're presumably meaning it in the sense of 'fixed term savings account' rather than premium bonds (the original subject of OP's enquiry) or corporate or government bonds, which are investment products rather than capital-protected savings ones....