Premium Bonds

[Papa Lazarou]

As this article from the excellent Martin Lewis site shows, if you are a higher rate tax payer Premium Bonds are likely to be a poor choice...

http://www.moneysavingexpert.com/savings/premium-bonds

Sorry - not well worded... shall we say, they are a good option if you are a lower rate tax payer.

 

[The Clown of Pevensey Bay]

A £1 million jackpot was won by a woman living in East Sussex. Bond
number 70QR054135 was bought in April 2005 and the winner has total holdings of
#3,000.

 

[scooter1]

I think the odds are something like 17 billion to 1 to win one of the two monthly £1m prizes.
I have 5 grands worth and on average get around 4% return - biggest win was £500, but normally its £50's with the odd £100. Bearing in mind interest rates are creeping up it pays to be a saver - Abbey are offering 8% interest on of their saver accounts at the mo, not sure what the stipulations are on that account though

 

[acrossthepond]

Anybody got some?

I'm thinking of getting some as it seems like a no lose situation - your money is safe (although not earning interest) and there is the chance of a prize each month.

For the amount I am considering spending, putting it into a savings account would earn me very little in interest anyway so I don't see that I am losing much even if I don't win anything for a whole year. Probably equivalent to buying a lottery ticket every week. Plus there is the excitement of being in the draw every month - who know what the prize could be (even though it will probably be £0!)

Any thoughts?

In general, great. I had some for years (until I moved overseas). But as has been pointed out, inflation eats into the value of your investment and with inflation on the rise I'd suggets that now is not the best time to get PBs.

I'd do this:

1. Pay off any credit card debt
2. Pay off any mortgage debt (if there's not penalty)
3. Fill up your ISA allowance

Before you start to do anything else.