NSI Premium Bonds

missile

IMHO: There is very little increment in rate / incentive for me to fixed term savings. Premium bonds still seem to offer the chance of a better return after TAX.

mills112

https://forums.moneysavingexpert.com/discussion/comment/82111328#Comment_82111328

what you could do is to invest in the premium bonds for a couple of years and see how well you do. only actual experience will make sense to you as you may find that you are really unlucky and get very little wins or that you happen to be one of those lucky people that seem to get very good wins.

because of this "luck", where some people seem to get a lot more than you would expect, then on balance, there must be people who get a lot less than you would expect. so why not try it out yourself and see which bunch you belong in.

i am generally a very lucky person, but my luck doesn't seem to pay off with the premium bonds and i tend to get less than the average.

wmb194

Low coupon gilts are another option. Capital gains are CGT free.

You can filter the table by low coupons:

https://giltsyield.com/bond/

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82111190#Comment_82111190

If you have the full £50k, then on average you will win one of the Million Pound prizes every 100,000 years.

StewedApple

https://forums.moneysavingexpert.com/discussion/comment/82112483#Comment_82112483

I remember reading Taleb on black swans. He worked as a trader and tore his hair out as some traders were treated as royalty for their "genius" picks whilst his results were rather ordinary, only to see the same traders a year later being booted out the door because they'd lost a fortune - the reality was both their lucky/unlucky streaks were statistically normal.

I recall in a recent draw someone who held £50 in bonds for less than a year won £100k - statistically normal.

4justice2

Applied for an NSI online account at about midday (not had one previously) and paid £50 by Debit Card for Premium Bonds. No email to acknowledge. No NSI number issued. Internet search shows up to 10 days before they open an account. Are they always this slow?

Beddie

There are lots of Debbie Downers when it comes to PBs. I always did well out of them when I had a full holding, which I no longer do. Others will do less well, or better - obviously.

It's a personal choice for you to make. Why not try it for a year and see how you get on. That will answer your question as to "which is better?" for one year at least. One thing we can say - they are more fun!

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82113448#Comment_82113448

NS & I systems are generally a bit clunky.

kempiejon

https://forums.moneysavingexpert.com/discussion/comment/82111328#Comment_82111328

At 20% tax a few short dated low coupon gilts seem to offer a better after tax return than PBs' headline or adjusted expected prizes, obviously better for higher rate taxes. PBs have the chance of anything from zero to phenomenal returns exempt of any tax.

missile

https://forums.moneysavingexpert.com/discussion/comment/82114205#Comment_82114205

While gilts are safer than most investments, they are not completely risk-free. There are charges which will erode any gains. They are not tax free: Interest paid by a gilt is taxed as income.