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Premium Bonds Vs ??

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  • Mintyrose
    Mintyrose Posts: 99 Forumite
    Second Anniversary 10 Posts Name Dropper
    Since the aim is to use the money in less than 10 years then you're correct shares are probably too volatile. Which leaves you with bonds, savings, and premium bonds as mainstream options.

    Premium bonds rates are variable and adjusted much like current savings accounts to make sure they are not too competitive - on top of that the return is not guaranteed, so while they're a lot better than gambling, they're not suitable for something you need certainty over. A top rate savings account will likely beat them and be guaranteed - you could also consider a notice (e.g. 30 days) or limited access (e.g. single access) account since you will likely make a single large withdrawal after consideration.

    You haven't mentioned tax status or whether you've used any of this year's ISA allowance - if not then you can shelter nearly all of it and maybe the rest could be organised to maximise the use of personal savings allowances for example. If you don't have any allowances remaining then premium bonds make a little more sense in terms of their ease of access.

    I think the other thing that would be helpful would be to sit down and work out what your current trajectory is in terms of when you are likely to be able to buy - if it's really quite a distant (6-10yr) prospect then you could maybe consider a fund that blends shares and bonds.
    Since the aim is to use the money in less than 10 years then you're correct shares are probably too volatile. Which leaves you with bonds, savings, and premium bonds as mainstream options.

    Premium bonds rates are variable and adjusted much like current savings accounts to make sure they are not too competitive - on top of that the return is not guaranteed, so while they're a lot better than gambling, they're not suitable for something you need certainty over. A top rate savings account will likely beat them and be guaranteed - you could also consider a notice (e.g. 30 days) or limited access (e.g. single access) account since you will likely make a single large withdrawal after consideration.

    You haven't mentioned tax status or whether you've used any of this year's ISA allowance - if not then you can shelter nearly all of it and maybe the rest could be organised to maximise the use of personal savings allowances for example. If you don't have any allowances remaining then premium bonds make a little more sense in terms of their ease of access.

    I think the other thing that would be helpful would be to sit down and work out what your current trajectory is in terms of when you are likely to be able to buy - if it's really quite a distant (6-10yr) prospect then you could maybe consider a fund that blends shares and bonds.
    Since the aim is to use the money in less than 10 years then you're correct shares are probably too volatile. Which leaves you with bonds, savings, and premium bonds as mainstream options.

    Premium bonds rates are variable and adjusted much like current savings accounts to make sure they are not too competitive - on top of that the return is not guaranteed, so while they're a lot better than gambling, they're not suitable for something you need certainty over. A top rate savings account will likely beat them and be guaranteed - you could also consider a notice (e.g. 30 days) or limited access (e.g. single access) account since you will likely make a single large withdrawal after consideration.

    You haven't mentioned tax status or whether you've used any of this year's ISA allowance - if not then you can shelter nearly all of it and maybe the rest could be organised to maximise the use of personal savings allowances for example. If you don't have any allowances remaining then premium bonds make a little more sense in terms of their ease of access.

    I think the other thing that would be helpful would be to sit down and work out what your current trajectory is in terms of when you are likely to be able to buy - if it's really quite a distant (6-10yr) prospect then you could maybe consider a fund that blends shares and bonds.
    Since the aim is to use the money in less than 10 years then you're correct shares are probably too volatile. Which leaves you with bonds, savings, and premium bonds as mainstream options.

    Premium bonds rates are variable and adjusted much like current savings accounts to make sure they are not too competitive - on top of that the return is not guaranteed, so while they're a lot better than gambling, they're not suitable for something you need certainty over. A top rate savings account will likely beat them and be guaranteed - you could also consider a notice (e.g. 30 days) or limited access (e.g. single access) account since you will likely make a single large withdrawal after consideration.

    You haven't mentioned tax status or whether you've used any of this year's ISA allowance - if not then you can shelter nearly all of it and maybe the rest could be organised to maximise the use of personal savings allowances for example. If you don't have any allowances remaining then premium bonds make a little more sense in terms of their ease of access.

    I think the other thing that would be helpful would be to sit down and work out what your current trajectory is in terms of when you are likely to be able to buy - if it's really quite a distant (6-10yr) prospect then you could maybe consider a fund that blends shares and bonds.
    Since the aim is to use the money in less than 10 years then you're correct shares are probably too volatile. Which leaves you with bonds, savings, and premium bonds as mainstream options.

    Premium bonds rates are variable and adjusted much like current savings accounts to make sure they are not too competitive - on top of that the return is not guaranteed, so while they're a lot better than gambling, they're not suitable for something you need certainty over. A top rate savings account will likely beat them and be guaranteed - you could also consider a notice (e.g. 30 days) or limited access (e.g. single access) account since you will likely make a single large withdrawal after consideration.

    You haven't mentioned tax status or whether you've used any of this year's ISA allowance - if not then you can shelter nearly all of it and maybe the rest could be organised to maximise the use of personal savings allowances for example. If you don't have any allowances remaining then premium bonds make a little more sense in terms of their ease of access.

    I think the other thing that would be helpful would be to sit down and work out what your current trajectory is in terms of when you are likely to be able to buy - if it's really quite a distant (6-10yr) prospect then you could maybe consider a fund that blends shares and bonds.
    Basic rate tax payer, minimum wage job, tiny private pension in payment, we’ve never had ISAs, have very elderly parent who isn’t in the best of health, sibling lives with parent, home is 50/50 inheritance wise, with caveat of 2 years for sibling to buy or we sell, also we would be 1st time buyers but probably in our 60s my that time, we want to save as much as possible then have enough to maybe only need 20-30k mortgage , then retirement(if we get there) no rent/mortgage
  • Mintyrose
    Mintyrose Posts: 99 Forumite
    Second Anniversary 10 Posts Name Dropper
    Do we pay tax on interest from ISA’s please? As you can tell I’m not too financial savvy, brought up to save for what we want 🤷‍♀️ 
  • masonic
    masonic Posts: 27,292 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Mintyrose said:
    Do we pay tax on interest from ISA’s please? As you can tell I’m not too financial savvy, brought up to save for what we want 🤷‍♀️ 
    No, interest earned on ISA balances is tax free.
  • Mintyrose
    Mintyrose Posts: 99 Forumite
    Second Anniversary 10 Posts Name Dropper
    masonic said:
    Mintyrose said:
    Do we pay tax on interest from ISA’s please? As you can tell I’m not too financial savvy, brought up to save for what we want 🤷‍♀️ 
    No, interest earned on ISA balances is tax free.
    Thank you, just reading up on them, they are expecting the government to change the allowance rate later in the year? Please could you explain - if we open 2 isa’s, one each, and deposit 20k in each as a lump sum, next year in April, does that just ‘stay there’ and we can open 2 more at whatever the allowance is? Thanks for your help  
  • El_Torro
    El_Torro Posts: 1,877 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Mintyrose said:
    masonic said:
    Mintyrose said:
    Do we pay tax on interest from ISA’s please? As you can tell I’m not too financial savvy, brought up to save for what we want 🤷‍♀️ 
    No, interest earned on ISA balances is tax free.
    Thank you, just reading up on them, they are expecting the government to change the allowance rate later in the year? Please could you explain - if we open 2 isa’s, one each, and deposit 20k in each as a lump sum, next year in April, does that just ‘stay there’ and we can open 2 more at whatever the allowance is? Thanks for your help  
    Yes, you can pay in your allowance to an ISA every tax year. So if you each put in £20k this year and next year the allowance drops to £10k then you can still put in £10k each next tax year, keeping your £20k plus any interest earned in the ISA. 

    Bear in mind that nobody actually knows if the allowance will drop in future, it's all just rumours at this stage.
  • [Deleted User]
    [Deleted User] Posts: 0 Forumite
    500 Posts Third Anniversary Name Dropper

    Also thinking if I am maximizing my returns, although if I were not a higher rate taxpayer, I would likely have it in a savings account instead.

    I have £50,000 and won £200 in March, £100 in April, and £0 for May.

  • Albermarle
    Albermarle Posts: 27,935 Forumite
    10,000 Posts Seventh Anniversary Name Dropper
    Mintyrose said:
    masonic said:
    Mintyrose said:
    Do we pay tax on interest from ISA’s please? As you can tell I’m not too financial savvy, brought up to save for what we want 🤷‍♀️ 
    No, interest earned on ISA balances is tax free.
    Thank you, just reading up on them, they are expecting the government to change the allowance rate later in the year? Please could you explain - if we open 2 isa’s, one each, and deposit 20k in each as a lump sum, next year in April, does that just ‘stay there’ and we can open 2 more at whatever the allowance is? Thanks for your help  
    There is an ISA sub forum. It is a good source of info if you read through it.
    ISAs & tax-free savings — MoneySavingExpert Forum
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