Many of us have heard of Premium Bonds and some may have been given them as a present to mark a birth or even as an investment from a relative as a tax-free gift, but their popularity has fallen in recent years and many of us have not kept records of how many we actually have.
In this current economic climate it has become a popular idea amongst us to try to find ways to increase of incomings whilst being able to afford the cost of living and what better way than to check whether our Premium Bonds have actually won us any money.
What Are Premium Bonds?
Premium Bonds are an investment product issued by National Savings and Investment (NS&I). Unlike other investments, where you earn interest or a regular dividend income, you are entered into a monthly prize draw where you can win between £25 and £1 million tax-free.
Are UK Premium Bonds a Good Investment?
In essence, yes as Premium Bonds can beat everyday easy-access savings. Still, you’ll need to have above-average luck to ensure that comes true – and for most, guaranteed interest from savings is the better option.
What’s The Maximum You Can Have in Premium Bonds?
The maximum amount you’re currently allowed to invest in Premium Bonds is £50,000 – with the minimum, you can invest being £25. Premium Bond winners could see their prizes taken away if they’re found to have more money invested than allowed.
Is It Worth Having £50,000 in Premium Bonds?
If you want instant access to your cash, you have £50,000 to invest, and especially if you pay higher rates of tax, they are good value, returning on average around 2pc a year tax-free.
However, it is a close-run thing as market rates from banks and building societies are rising rapidly. In the current market we are seeing some banks offer up to 7% on savings accounts.
How Much Can You Win With Premium Bonds?
Premium bonds offer novice and experienced investors the security of a government-backed savings account, with the chance to win up to £ 1 million each month.
Premium Bonds pay out two £1 million jackpots each month. But be aware that the current odds are 24,500 to 1 on that happening but with this investment you do not lose you stake unlike if you were to use the money to gamble.
Are Premium Bonds Better Than The Lottery?
Once you’ve got more than a few hundred pounds in Premium Bonds, your chance of becoming a millionaire is much higher with premium bonds than with the National Lottery.
Plus, you’ll keep your deposit money, unlike buying a lottery ticket. If you prefer certainty, a savings account is always the safest bet.
Can You Withdraw Premium Bonds At Any Time?
You can withdraw cash in all or part of your Bonds at any time. If you’re registered to manage your savings online, you can also easily withdraw money from your or your child’s Premium Bonds without needing to create an online profile.
Can You Lose Money Through Premium Bonds?
There’s no investment risk: Because Premium Bonds are government-backed, there is no chance of losing your money. This used to be more of a selling point, but the Financial Services Compensation Scheme (FSCS) currently protect all UK savings accounts up to £85,000 per person, per institution the savings are held with.
Do You Declare Premium Bonds On a Tax Return?
You do not need to declare them as tax on your tax return. Anybody over the age of 16 can buy Premium Bonds, and you can also buy them on behalf of your child or grandchild.
Yet money made from Premium Bonds, like cash ISAs, is always tax-free and does not count towards the PSA, so it’s almost like an extra allowance.
Are Premium Bond Winners Notified?
Premium Bonds prize winners are notified when they win a prize, but sometimes people move or change their contact details without letting NS&I know – this can lead to unclaimed prizes if they have opted to receive their prize by cheque.
Are Old Premium Bonds Still Valid?
Yes. As long as you haven’t cashed your Bonds in, they’re still valid and being entered into our monthly prize draws. These investments are held by the NS&I until they are either claimed or cashed in.
Where Do I Check My Old Premium Bonds?
You will need the details of either the Premium Bonds or your NS&I number but if you do not have them simply call the NS&I at 08085 007 007. The NS&I will answer questions for free over the phone. Give them a call any day from 7am to 10pm, and they will help answer any questions you have regarding old bonds—they won’t be able to relay personal information over the phone, though.
If you do not have the old Premium Bonds or any recollection of your NS&I details, then you can also go online at National Savings & Investments | 100% Secure Saving | NS&I (nsandi.com) and request your NS&I number by clicking into LOG IN and request an email confirmation.
Once you have your NS&I number just log in to view your prize history or use the prize checker to see if you have any prizes, you still need to learn about. Or you can write to NS&I asking for your prize history. Remember to include your name, address and NS&I number.
How Far Back Do Unclaimed Premium Bonds Last?
There’s no time limit to claims, so you can go back as far as you like.
There have been cases of Premium Bonds prizes that were issue over 40 years ago that have recently been claimed.
Once you do have all of the relevant details, they are extremely easy to check.
Dealing With Premium Bonds After Someone’s Death
The NS&I allows them to be held by the estate for one year after death; during this time, they will still be entered into the prize draw each month. Any winnings will be sent by a warrant, which is similar to a cheque, to the person entitled to claim the money.
Do Premium Bonds Pass To Next Of Kin?
Unlike most other assets, Premium Bonds cannot simply be passed on to beneficiaries of the estate, as they cannot be transferred into someone else’s name.
If you would like to take them out of the prize draw assets are generally sold or encashed during the 12 month administration period, although some can be transferred to beneficiaries who wish to keep the holding. With Premium Bonds however, there is no option to transfer them.
Is There A Downside To Premium Bonds?
If you want a regular income, there may be better options than Premium Bonds for you – you may be better off looking at different types of investment or savings accounts, including ISAS. You’ll also receive no interest, as the interest accrued on bonds goes towards the prize fund.
What Are The Disadvantages of NS&I?
Over the years the description of NS&I savings products is that they are not often aren’t market leading. If you’re looking to open a savings account, you might find higher interest rates elsewhere. Another negative associated with NS&I is that many new accounts, such as its planned Green Bond, are often announced months in advance.
