Premium Bond Winner ?

Sg28

Primrose said:

But if the interest takes you over a certain amount of "untaxable" interest income every year, I think you DO become liable on any surplus interest over that amount.  It it £12K a year?    No doubt there's a tax savvy person on here who can confirm?

And i suspect that if you give more than £3,000 of it away to family and then die in that tax yea, your estate becomes liable for Inheritance Tax on it?       Some of these big wins may not come without their own tax problems?

It doesnt count towards your tax free allowance either. 

Inheritance tax is totally different, the money would become part of your estate if you died. 

ColdIron

Primrose said:

But if the interest takes you over a certain amount of "untaxable" interest income every year, I think you DO become liable on any surplus interest over that amount.  It it £12K a year?    No doubt there's a tax savvy person on here who can confirm?

PB wins are tax free and invisible to HMRC just like ISAs. They don't count towards your Personal Allowance or your Personal Savings Allowance

And i suspect that if you give more than £3,000 of it away to family and then die in that tax yea, your estate becomes liable for Inheritance Tax on it?       Some of these big wins may not come without their own tax problems?

While money in PBs does count as part of your estate (like most cash assets), if you gift the money they are no longer in PBs so could hardly be seen as a shortcoming of PBs

Indout96

Nothing again for both me & Mrs indout.
seriously wondering about pulling them out now when we can get 4%+ on a 1 year fix

becky_rtw

Nothing last month but £200 (1 x 100, 1 x 50 and 2 x 25)for me this month on circa 45k.

Then locked myself out this morning trying to make a withdrawal 😂 luckily I don't need the money this instant but we are moving soon and wanted to make sure I had enough cash in my account to cover extra costs. Now awaiting a reset letter from N, S & I 😵

DjangoUnchained

this month nothing on maximum. Working out if i had this money in a 1 year saving account at about 4.3% id have earned £166 this month. time for a change i think.

ColdIron

Fixed term/rate accounts pay enhanced interest to compensate you for locking it away. PBs are easy access and tax free. Hardly a fair comparison

Johnjdc

patgarrett said:

Nothing on max holding. 

£75 across my family in total on 3x the maximum holding.

Bit of a sickening start to the new era of 3% prize fund rate!

DjangoUnchained

ColdIron said:

Fixed term/rate accounts pay enhanced interest to compensate you for locking it away. PBs are easy access and tax free. Hardly a fair comparison

yes i understand that, but im just talking about my position. Happy to lock it away. Previously highest rates were around 2% so PBs seemed a good idea. I understand about the tax free bit too. I think my PBs have performed under 2% (hard to work out as i didnt always have the full £50k) I suppose the bit of fun in dreaming for a big win is nice but i have several accounts with fixed one year deals maturing at different times  so i think i will pull out 30k and do another one. Just keeping £20k in for easy access and the chance of a win.

inflationbuster

Really miffed this month no wins and very poor return so far.  Don't be fooled by the so called 3% return. 

Invested	Total prize	Yield	Tax Year
£50,000.00	£375	0.75%	22-23
£50,000.00	£425	0.85%	21-22
£50,000.00	£775	1.55%	20-21
£50,000.00	£725	1.45%	19-20
£50,000.00	£950	1.9%	18-19
£50,000.00	£450	0.9%	17-18 starting  Nov

If interest rates rise further may consider pulling out and placing into a fixed rate bond.  

eskbanker

inflationbuster said:

Really miffed this month no wins and very poor return so far.  Don't be fooled by the so called 3% return. 

I don't think anyone (else) is being 'fooled' - it's a matter of fact that the total payout is 3%, but a more realistic 'average luck' expected return, based on the median average rather than the mean (allowing for the distorting effect of tiny odds of large prizes), is about 2.4%, but even that is very much an average and there will be plenty of holders who better that (see above) and many who will achieve a lower return.  That's just the nature of a random draw - winning fewer prizes than that median average doesn't signify anything underhand....