Premium Bonds for child - ownership

MoneyTown

Regardless of whether or not Premium Bonds are the best purchase for a child, I'm wondering what would happen to any prizes the child 'wins' ?

As far as I can see, if the child is under 16, the parents can buy Premium Bonds in the child's name and keep the winnings and be able to sell the Premium Bonds and take the cash too? Is that right? If so at what age will the parents lose control?

I've read the PB terms and conditions but the ownership details aren't clear.

thanks.

Kay_Peel

You're right - the Terms and Conditions are not clear on this point.

I can only tell you of my own experience - which is not much help, really.

When my children 'won' (and I can count the number of times on three fingers during their childhood!) the money was automatically reinvested in new premium bonds. The Bonds had been bought by grandparents and they ticked the box for automatic reinvestment, at the time of purchase. So, I only received notifications.

Both my children cashed their premium bonds in as soon as they reached 18 and bought a new set of bonds with the proceeds (on the advice of their grandad) and guess what?

They won more money in the first two years than in all their previous 18 years!

Wierd.

Sorry I can't be more helpful, but I've bumped this topic up the list and hopefully someone will have more useful experience to pass on.

Good luck.

Kay

Reestit_Mutton

Both my children cashed their premium bonds in as soon as they reached 18 and bought a new set of bonds with the proceeds (on the advice of their grandad) and guess what?

They won more money in the first two years than in all their previous 18 years!

As a trained mathematician, I can tell you that the above advice was flawed. The subsequent wins had nothing to do with the age of the bonds. Anyone following such advice would be doing so purely on the basis of superstition and would effectively be losing out on at least one draw as new investments always miss one draw before being entered.

Equally, if you are a lottery player, against most people's "better" judgement you stand to maximise your potential winnings if you always play numbers that won the previous week. The reason for this is that the odds of winning with those numbers haven't changed but human superstition dictates that far fewer people will be holding those numbers thus your expected share of the winnings for 6 numbers (and possibly also for 5 numbers + bonus ball) will be larger.

To the untrained eye, this may sound like a perverse suggestion but I can assure you that there is a sound mathematical basis behind it.

What is perverse, however, is that now that I've said this, if everyone decided to follow my advice then the human pschology part of my reasoning would break down.

Reestit Mutton

Kay_Peel

Hang on. I wasn't advising anyone do anything. I was reporting facts. I thought it wierd, in fact - and said so. If you mean the 'advice from grandad' - to cash in their bonds and buy new ones - that wasn't based on supersition, I can assure you. It was based on his experience.

Call it wierd, call it a fluke, call it a hunch or call it plain old desperation at 18 years of big fat zilches. Who knows? And 'who cares?' say my children as they pocket another 50 pounds.

MoneyTown

I think what I'm getting at is can the child's (aged under 16) Premium Bond allowance be used as a storage for money that gives a tax free return for the parents without their capital being owned by the child?