The UK's Dangerous Addiction to Premium Bonds

Premium Bonds - The Nations Favourite Gimmick that will set you back £1,000s.

*Looking for help with Financial Planning?*

DISCLAIMER:
This channel is for education purposes only and does not constitute financial advice - James is not responsible for investment actions taken by viewers. Please seek out a regulated advisor if you require assistance (whilst James is a financial adviser, he does not provide advice through this Youtube Channel, which is not affiliated with his employer).

James Shack™ property of James Shackell
Copyright © James Shackell 2023. All rights reserved.
The author asserts their moral right under the Copyright, Designs and Patents Act 1988 to be identified as the author of this channel and any video published on it.


00:00 Premium Bonds
1:03 How They Hook You
5:03 The Maths
8:21 What You’re Missing Out On

[JamesShack]

Thank you for the comments, clearly Premium Bonds cause a lot of debate!

To be clear, I’m not suggesting you should do away with an emergency cast fund and invest it. You should hold an emergency fun at all times, just make sure it doesn’t get too big. 👍🏻

[dabe]

To be fair, my few thousand quid emergency fund held in Premium Bonds was outperforming any available savings accounts until we saw the base rate increases.

[I_Was_Chrispy_Kreme]

The one thing James forgot to mention about Premium Bonds is they don’t pay any commission to advisers.

[Oldskooladdict]

I've held them for a couple of years, my return is lower than the stated average, but it's not bad, and when you factor in the lack of tax it's pretty close to easy access rates. Plus it's a little bit of fun!

[Artbooksandboro]

I was bought £10 of premium bonds in 1984 by my great grandmother when I was born. I found the little yellow card with the number on it a few years back, updated my details and checked how much I had. I still had £10 😂

[Manc-fhwe]

A great way of keeping the interest/winnings on £50, 000 out of the way of the taxman. Definitely not a gimmick in my opinion.

[Doubledig]

National Savings Premium Bonds were first issued in 1956 not 1994 as stated.

[stephengandy]

I've recently sold our kids premium bonds, which were given by grandparents and invested the money into child's stocks and shares ISA's. Much better return for when they reach 18.

[Ruddigore]

As a senior citizen (aged 70) I have £50, 000 invested in premium bonds and they bring in a regular monthly income, I love them. They pay out far more than I used to get when I had the cash invested in an ISA. The only way I could get more of a return would be to invest in a more risky investment plan and tied up for a lengthy period, neither of which I find optimal for a person of my age.

[DW-ddiw]

The reason i have Premium Bonds (PB) is because if i put £1, 000 in a building society account and got £25 pa in interest, it's not going to make any difference to me.

With PB, I get the same return of £25, but i may win, say, £1, 000+ which would be very handy. Plus, this stops me buying lottery tickets, which really is throwing money into the wind!

[Rog]

Having invested in Premium Bonds over the last three ears, I thought I must watch this video. Having watched it, I'm keeping my money in the bonds.

[paulfarr]

I like them. I use them basically as a Lottery ticket, that I can’t lose on. I’ll literally get my ticket cost back. I don’t use them as a primary investment source, just a bit of fun on the side.

[neilcook]

I keep my stud dog’s fees in premium bonds and he’s made £100 this year, he enjoys his work and doesn’t want to retire.

[danielbrown]

Interesting video, thank you. I keep £10, 000 in premium bonds as an emergency fund but this does raise the thought of moving this to an easy access saving account for higher guaranteed interest returns on my money.

[mrflibble]

I have twice as much in an ISA as i have in premium bonds. Premuim bonds have made 3 times more that the interest from my ISA.
I have a hard time seeing it as a gimmick.
Especially, when my mother, my Uncle also have premium bonds that are doing just as well.

[alishaortmann]

Only one person has ever been hit by a meteor in recorded history and the odds are 1 in 700, 000 yet the lightning hits the earth on a daily basis but the odds are 1 in 5million. How does that make sense

[DrBenVincent]

Agree. If you are maxing out your ISA and SIPP allowances, then Premium Bonds are perhaps not a bad place to keep an emergency fund or short term accessible cash for planned big spends

[davidalexander]

I have met with financial advisors and they drone on about saving for retirement. You cannot predict if I will get there, many of my friends have not. My children told me to enjoy life and they do not care about any inheritance.

Yes I have premium bonds, they are fun. Yes, I buy lottery tickets and yes I am out of pocket. But I have something called enjoyment and you cannot put a price on that.

I predict you will be a rich man but when you die you cannot benefit from that.

I can guarantee if I consult a financial advisor it will suck away 95% of what little enjoyment I have in life.

I am not rich, but I have had, and still do have an enjoyable life. Some banker is not benefiting from my money though

[kobalos]

If you are a high earner and you need to save money for a house deposit, there is simply no other financial vehicle that allows you to save £50k and earn interest tax free. Unless you want to waste the ISAs allowance for storing cash.

[jamesworkman]

I think another fair use case is for a lot of people who have very little savings. If you have a couple of hundred quid in them, you aren't missing out on any meaningful interest as 3% of f all is still f all. Plus a million would change your life.