Are Premium Bonds A Good Investment?

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Premium bonds are the most popular 'investment' in the UK, but should they hold that title? Are they even a good investment?
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Timestamps
00:00 - Secure
01:00 - Lottery
02:10 - Attractive
03:04 - Maths
04:30 - Ghosts
05:22 - superstition
06:52 - Calculate
08:00 - Investing
11:04 - Tax
13:10 - Spice

Опубликовано:

20 июн 2024

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Комментарии : 685

@DamienTalksMoney 3 месяца назад

This video is the first in a new series where each month we will examine whether popular ways to save and invest actually live up to their promises. Please drop your suggestions below for what else you want me to cover.

@nateblanche2551 3 месяца назад

Fantastic idea Damien! I'm definitely here for the journey.

@Jalleur14325 3 месяца назад

Gold

@LR_Jordan 3 месяца назад

Uranium

@azharsheikh8337 3 месяца назад

Gold&Silver please. Thanks. Love your videos.

@guydudley 3 месяца назад

Great video. I'd be interested in a look at investing in classic cars and similar depreciating assets that people convince themselves are a good investment.

@NicholasBall130 19 дней назад

The most important thing that should be on everyone mind currently should be to invest in different sources of income that doesn't depend on the government. Especially with the current economic crisis around the word. This is still a good time to invest in various stocks, Gold, silver and digital currencies

@cowell621 19 дней назад

The key to big returns is not big moving stocks. It's managing risk in relationship to reward. Having the correct size on and turning your edge as many times as necessary to reach your goal. That holds true from long term investing to day trading.

@LiaStrings 19 дней назад

Even with the right technique and assets some investors would still make more than others, as an investor, you should’ve known that by now, nothing beats experience and that’s final, personally I had to reach out to a market analyst for guidance which is how I was able to grow my account close to a million, withdraw my profit right before the correction and now I’m buying again

@RafuqueAhmed117 19 дней назад

Could you kindly elaborate on the advisor's background and qualifications?

@LiaStrings 19 дней назад

The advisor that guides me is Sharon Lee Peoples most likely the internet is where to find her basic info, just search her name, She's established.

@markmahood3093 3 месяца назад

I've my emergency fund in premium bonds. I find it handy as I'm not tempted to spend it as its out of my current account. Also i do it instead of the lottery for a small bit of excitement in an otherwise rather dull existence 😂

@demos113 3 месяца назад

Exactly the same reasons as myself. 🙂

@logosg 3 месяца назад

😂

@anterosLondon 3 месяца назад

They are fantastic! Every friend abroud is jelous we have them here.

@marcse7en 3 месяца назад

That's EXACTLY how I view mine! As an emergency fund, that's safe, and not easy to spend, and can win you money! I won in November, December, January, and March! A tidy sum too!

@grahamnichols1416 3 месяца назад

Premium Bonds are far better than the lottery. Unlike the lottery you don't lose money if you don't win.

@VegasMilgauss 3 месяца назад

As a high rate tax payer the fact they are tax free, safe as can be and can be accessed whenever make it a no brainier for emergency fund.

@gdwnet 3 месяца назад

Totally right. Easy to transfer the money in and kinda forget about.

@thejudge2352 3 месяца назад

Agreed.

@tommyb8202 3 месяца назад

Yep, its the tax free element that makes the difference. On average my bonds makes more than saving accounts because of how much the savings would get taxed

@Kazi2812 3 месяца назад

A cash ISA is tax free too...

@slabbygabby 3 месяца назад

What looollll. Have you maxed out your sipp and isa

@AliBapcyk 3 месяца назад

The production quality on your videos is really getting next level. Watching the journey is such a joy. Love to see it.

@DamienTalksMoney 3 месяца назад

Thank you so much! Only just getting started I want to really see what a finance video can be and currently I am held back by my own lack of skills

@wheeldo 3 месяца назад

Walking around the barrier into the "fortress of a compound" at the end 🤣🤣

@AliBapcyk 3 месяца назад

ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-BpRZSPNZY7w.htmlsi=fRtAF5kFv_JMAI8K “Because sometimes, it’s really hard to actually do your own ideas” 😄

@randomallan3724 3 месяца назад

@@wheeldo Its an empty building been like that for years :) They moved out and built houses as you can see in the video.

@repentmaster2842 3 месяца назад

It's highly liquid (withdraw when needed), risk-free (guarantee capital preservation) and tax-free, with high potential upside (albeit low chance). Certainly has its unique place and value amongst the heavily-taxed British. As you said, it's a tax-free shelter for the people (especially those who can't afford to hire accountants to setup companies/FICs to dodge tax), so it's doing good for the public

@Banthah 3 месяца назад

Agree with everything you’ve said, apart from it being risk free. The very real risk is that you don’t win anything, and are losing out on gains elsewhere. Let’s take the average £5k investment and the 5% return that Damien mentioned. Investing £5k after 20 years at 5% you end up with £13.5k - a gain of £8.5k. If you put your money into Premium Bonds and don’t win anything you still only have your original £5k - which every year is losing buying power because of inflation - especially these days. It is not risk free at all. Your risk is an £8.5k loss And that’s at a low 5% rate. Investing in the S&P 500 averages around 9% over 20 years - meaning your £5k would on average become £30k. That’s a £25k risk

@d0palwh56 3 месяца назад

Couldn’t disagree more. It’s guaranteed capital deterioration (inflation), not preservation, and there is almost no chance of an upside. Yes, buying an index fund carries risk of downside (mostly in the short term), but compare the returns from any year since records have begun - the opportunity cost is enormous.

@jabberwockytdi8901 3 месяца назад

The British are not heavly taxed, for instance our annual income tax free allowance is double most other european countries. Among those countries with universal health care we have low taxation and if you think the US is lower taxed would you really want to put up with their apalling labryinthine multilayered tax system? - even before you consider that ferociously high cost of healthcare there (where also your care is ultimately capped by the limits of your insurance unless you are very rich )

@repentmaster2842 3 месяца назад

@@BanthahI agree money de-value over time in the past century, so the wisdom was to flee to hold real assets. But picking the right stock/fund from S&P 500, and time the market right, is not easy for layman. 80% people loses in stock market and funds; I believe there are too much misinformation in the financial market and mis-sales driven by commission and management fees. I still think the loss in real value due to inflation, is the lesser evil compared to stock/funds' investment loss from mis-sale/misinformation (and this hasn't consider capital gain and income tax yet)

@repentmaster2842 3 месяца назад

@@jabberwockytdi8901British are heavily taxed compare with Singapore and Hong Kong (no capital gain and dividend income tax), and no N.I or 20%/40% income tax thresholds and compulsory pension that may extend to age 71+

@IssieAndLife 3 месяца назад

This is a solid video! I've been keeping most of my emergency fund and house deposit in Premium Bonds for the last 2-3 years for the exact reasons you describe at the end. I've found the golden amount to hold is between £20k and £25k for "luck" and payout reasons. Using the MSE calculator, I worked out that keeping less than £10-15k or greatly increased how much luck factors into the winnings. In my personal situation I've found I've been better off with PBs compared to best interest savings I had access to by about £100 in the last year. It definitely needs to be compared to savings account as opposed to an investment. Obviously in my case I should've invested 2-3 years ago, but I may need quick access to the money, and I'm not eligible to use a LISA for house purchase.

@seanwalsh168 3 месяца назад

I stopped my DD to lotto around mid 2021. I basically just took my £25 DD for Lotto and instead used it to get premium bonds. I was lucky to win £100 last October which now has my pot at £1125. That’s more than I have seen in return from lotto in a 5 year period. I’d go as far as to say with lotto I was massively out of pocket. This swap was and still is a no brainer for me. When pairing up against lotto.

@Loundsify 3 месяца назад

I've won £1100 since October. £50k holdings as it's basically my deposit for a house.

@slabbygabby 3 месяца назад

@@Loundsify Why not use a Lisa? Or have you mixed your Lisa out?

@Yorkshiremadmick 3 месяца назад

Plus you still have £1125 cash 💴

@seanwalsh168 3 месяца назад

@@slabbygabby well my logic was this was my lottery alternative. I also am currently paying a mortgage on my first property. And I dont max out my ISA so I didn’t see a benefit in LISA. Unless I’m missing something

@user-hm7kq7lz9l 3 месяца назад

One aspect you didn't highlighted is the security of premium bonds. It's important to note that NS&I is government-backed, ensuring the safety of funds in the event of bank failures or similar circumstances. This makes premium bonds a secure alternative option for holding money also.

@adamp6320 3 месяца назад

Additional rate payer here, yes PB are where I stick my emergency fund. It's liquid, safe, and if I'm lucky enough to win (usually between £25-£100 a month) I don't pay any tax.

@drfurbz 3 месяца назад

The production value on these videos is really starting to show, love the content keep up the good work.

@progress2success402 3 месяца назад

8:17 Damian this is one of the most important things I have ever heard you say that I don’t think a lot people understand it! Could you cut this into a short to expand its reach!! This I feel aligns with your purpose/goals 😉

@Nates33 3 месяца назад

What a video Damian! Loved the new format, loved the structure of the video and the fact that it contained everything that it needed and still wasn’t boring or too long. Bit of history, a few puns and jokes, maths and taxes of it all and then the personal reference and your personal take. Great video overall, keep up the good work!

@mattsennett 3 месяца назад

I got £1,500 last year on the full £50k. For me it's the best place for my emergency fund and I am happy to "pay" for a bit of spice each month when the draw comes around. You never know your luck 🤞🏻

@sebluketravis2438 3 месяца назад

don't buy spice, it is an addictive drug and many people end up on the streets.

@oph1066 3 месяца назад

Thanks this really made me think. Probably not in the way that most might (I have Premium bonds I need to see swap them for fixed interest rate) but something different. I have savings, shares, ISA's and a SIPP the whole shebang. I also play the lottery every week for fun and its that part that made me switch my money from the lotto to premium bonds simply the idea that my money each month rolls over instead of being thrown away and a new ticket purchased so over the year I can stick £120 in PB and worst case its still there each year best case you will a Million

@ProfoundFamiliarity 3 месяца назад

Great video. I'm with you on this one. I wouldn't invest in PBs. My family love them though. They like the occasional joy of finding out that they've "won" something. I was trying to convince my dad and sister that I only hold on to my old £100 premium bond (the physical piece of paper) from the 1980s for sentimental value. I don't think they understood but such is life!

@scoobydoo12ism 3 месяца назад

Finally, someone from a younger generation than myself giving good quality investing advice. Keep it up mate…loving the “out and about” style of video too, it’s a good concept, makes everything feel like a mini documentary rather than someone sat in a boutique studio rattling off shite…that’s when the viewers attention span falls off, keep up the good work pal💯👍🏻

@paulm6742 3 месяца назад

Superb explanation, I have a tiny £500 in premium bonds I've had for a while but I've wasted untold amounts on the lottery. Will follow your suggestion and pay into my bonds instead.

@d0m96 3 месяца назад

Your videos are just getting better and better. Going on location, and interspersing these historical videos is awesome!

@DamienTalksMoney 3 месяца назад

Thank you very much! Glad you enjoyed those points as it makes the extra effort all worth it

@Jalleur14325 3 месяца назад

Great video with old clips and history. 👏🏻 - great editing. I have money invested but have made probably about 1-2% yield over 5 years on average. Mostly I get £25 (every 3-4 months approx), but once I got £1000 (probably to keep me invested!). I invested at a time when there was 0% at the bank.

@christines5430 3 месяца назад

Great video! Your videos are getting better and better, and they were already good. I have kept a part of my emergency fund in premium bonds for a few years now. Never won anything, but the attraction is that I won't lose my capital. It's highly liquid, plus there is a very small chance that I might actually win something .

@MarkHanna824 3 месяца назад

This is so weird, I was going to comment on your next vid asking your opinion on premium bonds! Always giving us the content we need!🧡

@nickceppi3553 3 месяца назад

Great vid as always. Keep pushing the space - the extra detail and effort in these videos doesn’t go unnoticed! On tax free income that you cover at the end… one thing I don’t see a lot of people talking about w.r.t. tax free sources here in the uk… the income from Gilts/uk gov bonds are exempt from capital gains tax. Long story short, this makes up the majority of the return on gov bonds (as the bond is typically bought for less than its principle). With higher rates and outdated tax free thresholds on interest income, a lot of people have been putting money into these to achieve a better post-tax return on their cash. Even more relevant now capital gains tax allowance will be 1/4 of what is was. Could be worth running the numbers and exploring this topic in a video while rates are still high. Although this is mainly attractive to people who are higher rate tax payers, past 10k invested interest income (as you mention) and already filled 20k ISA allowance for the year… so limited audience. But gilts are getting more interest because of this. Cheers, Nick

@rupertmiller4718 3 месяца назад

Its not entirely straitforward but is actually a good idea. There are different gilts and at the moment the short dated are yielding more than the longer term. The interest or coupon on gilts is taxable the gain is not. So the trick is to buy low coupon and maximise the gain element.

@nickceppi3553 3 месяца назад

@@rupertmiller4718 exactly, a bit of nuance to it, but can be an attractive option

@LEWIS1992 3 месяца назад

Great video! Well scripted, well edited, and back to your roots. Thank you! :)

@darylbultitude3786 3 месяца назад

That. Was. Amazing. If these are the types of video you want to make moving forward then I am all for it! I only hold bonds in an investment fund but listening to this, you said something about making saving more exciting. I think this could be a great product for my boy, get him exciting about saving

@ademcguinness8132 3 месяца назад

Essentially, if you struggle with good financial habits (such as paying yourself first and leaving your savings alone) then premium bonds can be a helpful tool to help you save. They are not investments in my view, but a lottery ticket where you loan the government money and you might get a prize over your entire life, with the benefit of not affecting your Capital Gains Tax :) People on the internet stating it has a "yield " claiming the chance to win is an effective interest rate is at best misrepresentation and at worse a terrible lie.

@jonathanfaull1880 3 месяца назад

But it's still nice when you win a couple of hundred quid and Camelot didn't get to keep it. Ah if only John major had been a statesman of Harold Macmillan stature.

@firesaab31 3 месяца назад

With ISA’s maxed out, as couple we have the max allowance of £100k. It will be 19 months at the end of March. I have had double the return over that period compared to my wife. Against the best savings accounts we are only slightly down on what we would have earned after tax. We are happy to accept that.

@gordon861 3 месяца назад

Interesting video, colleague at work was talking about these the other week. Don't have any bonds but they seem a good place to throw any surplus funds you may have that you don't want locked away elsewhere. If you have £500 it's probably a bunch of hassle working out the 'best return' because the numbers will be so low, so just throw it into Premium Bonds and you might be lucky, but you will at least still have £500.

@lyracian 3 месяца назад

I have heard it all before but did enjoy the way you presented it. For me Premium Bonds are my emergency cash fund due, as you said, to the tax free return. Once I have 20k in my ISA each year then spare cash goes into bonds.

@nikoc3585 3 месяца назад

Make sure you pump your SIPP to £60k max before you do! You can spend a SIPP on commercial property, gold bullion at the royal mint, stocks share etc!

@lyracian 3 месяца назад

@@nikoc3585 That locks it away until you hit retirement age though. If I have a crisis then premium bonds are an easy access option.

@DarrenSmith-tq2xz 8 дней назад

And it's all at risk enjoy the rest of your life being poor by the day no one understands that you have a counterpartie and when we have another crisis which is going to be 2008 on steroids banks are insolvent no deals no loans and no deposits get ready for the banking bust by design you'll own nothing and be happy

@elainhayter9144 3 месяца назад

I love PB. I use them to save for big one off expenses such as our family holiday to Florida and now saving for our wedding next year. For me they're risk free and I might win some money along the way (which i have done). Loving all your videos Damien 🤩

@DamienTalksMoney 3 месяца назад

Yeah I also save my tax money in them! They have a special place in my financial heart

@Waddywoos360 3 месяца назад

@@DamienTalksMoney the risk-off nature of them vs the stock market where most people will have their pensions & ISA's invested is part of the attraction of premium bonds - parking your tax value in there is a great idea!

@laurelharper123 Месяц назад

I like investing in close-end funds that pay monthly dividends. The trick is to hold long term and reinvest the monthly dividends plus buy more shares on a monthly basis or whenever you can afford to. This can be easily done because close-end funds are bought and sold on the stock market just like regular stock. That'd be enough to create a portfolio that would pay you between $50k to $70k in dividend income

@Me-ll4ig 3 месяца назад

Great video again Damien. I’ve never seen PB as an investment but just a prize draw. It always puzzled me why PB advertised it as such? Your video explains it brilliantly.

@LynneF-jx2uj 3 месяца назад

Very informative, Damien. I have held some NS&I index linked savings certificates for years as another tax free option. Shame they are so rarely available now!

@brianwillson9567 3 месяца назад

Index linked. So glad I made the maximum subscription, issue after issue. But even then they rig the return by changing the index to a doctored lower one.

@Ken_H_ 3 месяца назад

I have my emergency fund, basically a years salary in them, prizes paid to their savings account and then once the interest is paid I withdraw and pay into my stocks and shares ISA. Accept it would be best to pay any prizes into my ISA monthly but I like keeping things simple.

@jamesbarry1739 3 месяца назад

The instant access is also a big plus. It's where ive stashed my deposit for a first home and Im getting better returns than with instant access savings accounts. With the unrealistic caps on help to buy it seemed the best way to go.

@schopesonline 3 месяца назад

Have you considered a LISA?

@jamesbarry1739 3 месяца назад

@@schopesonline I live in London, so it's the same threshold

@MaxwellBoulton 3 месяца назад

Damien On Location and Studio Damien works well and helps break up the story telling, would love to see more of that! Keep it up Damo! -Max

@harrisonshaw513 3 месяца назад

Great video again Damien. The editing and story telling was brilliant. I think you could have talked more about the entertainment factor of them which you touched upon at the end.

@merdoca2358 3 месяца назад

Nice Damien thanks, I really liked the way you put this together, noticable increase in the production values. Reminds me of 'the big short' one you did

@stevegeek 3 месяца назад

Great overview Damien. I've held £50k in PBs since last Sept but only to avoid the tax on savings interest, having maxed out my ISA / pension allowance. However I recently retired so starting in the new tax year I'll begin withdrawing them to fill my ISA and supplement my pension. My monthly winnings on £50k since Sept are: 1.Sept £275 2. Oct £200 3. Nov £100 4. Dec £0 5. Jan £100 6. Feb £50 ...so £725 total. This equates to £1450 / year or 2.9% "interest" on £50k. Meh! Better than nothing I guess...and at least it's tax-free. Edit: Actually it's less than 2.9% since I transferred the £ to NSI end of July but wasn't eligible for the Aug draw, so it's 2.5%.

@kieron8051 3 месяца назад

Smart move filtering out of that rubbish into the isa I’d say….

@MWR1990 3 месяца назад

Damo on location. Love it! I’d totally forgotten premium bonds existed!

@MoneyGist 3 месяца назад

I think the original problem was referring to this "investment" as "bonds."

@georgeacres4 3 месяца назад

That merge at the end from voiceover to continuing the sentence outside NS&I was smooth... didn't go unnoticed!

@DamienTalksMoney 3 месяца назад

💁🏼‍♂️

@asmith9140 3 месяца назад

put it this way spend a £1. On lotto and it's gone wbut save those pounds up and buy premium bonds then you've a chance of winning something or cash them in and get your money back

@Armadyllo 3 месяца назад

Good video Damien though we should not forget about the Taxman when we talk about the interest gains from Savings accounts.

@135eddy 3 месяца назад

I have £50k in premium bonds and on average I get over £200 a month so I don’t think that’s too bad

@garybenn9482 3 месяца назад

It's where I keep my 10 month emergency fund and my monthly holiday savings. It's a bit of fun. I like that it's easy access without the psychological pitt falls of an instant access savings account that I tend to dip into more than I should. Premium bonds prevent me from doing that for the fear of missing out on the prize.

@diddly206 3 месяца назад

I had just over a thousand pounds in my account when I won £5,000 last year. I’ve decided to withdraw all the money and look at investing instead since I don’t think I’d ever win on it again.

@mikebarry229 3 месяца назад

I know several people with Premium bonds, some win all the time some hardly at all, so maybe some batches of numbers are luckier than others. Luck is chance and probability at play, the fact that you won £5000 doesnt affect your chance of winning the same amount the next month or the one after that. With your luck I'd have kept £1000 of the winnings and put the other 4k in more PB's. If you win nothing again for the rest of your life it's still not cost you anything as you kept £1000 of your winnings, and you would still have £5000 safely stored away.

@tortozza 2 месяца назад

Ironically your chance of winning would be six times what it was before

@roberthuntley1090 3 месяца назад

My take - ignore the big prizes because you won't win them (and if you do, it a nice exception to the rule). Focus on the steady stream of £100 and below prizes (if you hold enough bonds). With £50k held, I normally win zero two months a year, £300+ two months year, and the rest average out at £100 or so. Total over the last 12 months is £1700, tax free, so not too bad. Also don't totally ignore the mid range prizes, over the last 20 years I've one on £1k prize (I only had £30k invested back then) plus one £500 prize - so these come up once a decade or so. This variability makes it futile trying to compare the "investment rate" with other ways of saving, one lifetime is too short to average out these effects.

@4444aliraza 3 месяца назад

I think this proves the point Damien is making. Thanks for sharing.

@Al_Does_Stuff 3 месяца назад

The fact you get cash out is nice, however even at 30k 1k winnings is about 3% assuming the rest of the year ran even with your averages (which it probably wouldn't as your averages are for 50k) your hitting 9% tax free return for the big win year. Taking your 50k and your average return it's actually about 3.4% YoY which is a bit meh. I think PBs are a good emergency fund as it's a bit of a set and forget with no tax implications but not great for wealth creation. I do pay into premium bonds regardless as I find it convenient to have as a ready cash source which can be useful for throwing into ISAs and the like at the start of the year. I do however wonder if with my level of income I'm better off elsewhere.

@Waddywoos360 3 месяца назад

@@kieron8051 That is assuming you haven't already filled up your ISA allowance. The real question is whether its better to put it into a regular ETF and pay capital gains or park in premium bonds for tax free growth. Given market exposure through pensions and ISA, my view would be to go the NS&I route for at least a certain amount as its a risk off asset to balance you out.

@KyleGoslan 3 месяца назад

Ouch! This is very unlucky, I’ve less than 30k invested and won 10 times over the last 6 months…none of them £25 either.

@usgreth 3 месяца назад

In between here, also less than 30k but about 10 wins over 12 months, you got lucky with none of those being £25! @@KyleGoslan

@liamwalsh75 3 месяца назад

For an emergency fund I prefer the Vanguard Sterling Short-Term Money Market Fund paying 5% , 🤷‍♂️ Put it in as part of my ISA allowance. But obviously everyone has different financial circumstances.

@Narky 3 месяца назад

If you're a higher earner the tax free prizes from premium bonds are worthwhile like you said Damien. I've had two maxed out accounts at premium bonds for a few years and the fact i don't need to pay tax on the winnings is why i keep it running.

@Balancing.The.Budget 3 месяца назад

Premium Bonds are my fave place to have my emergency fund! Plus I’ve won over £400 in the past year on just under £2500 of premium bonds. Also I just love the excitement of the month around draw time! 😂

@dondarkblade1460 3 месяца назад

im adding to these monthly as an emergency fund im not bothered if i get a win the thought of another 2008 and the banks doing a bail in not a bail out means i will be able to pay my bills if SHTF. good vid 👍

@katem6562 3 месяца назад

Same here! Not sure it’s worth it as an investment but as an emergency fund it’s worth it for peace of mind

@DaveWarlow 3 месяца назад

I had Premium Bonds since I was a kid in the 90's. Not once did I win any amount. I had forgotten I had my bonds until last year, then I hit up NS&I and sold them. I walked away with £1800. That's £1800 that had sat there NOT accruing interest for almost 3 decades.

@Al_Does_Stuff 3 месяца назад

Do you know if that was the original amoun? Going that far back any winnings would most likely have been posted to you. I know from the web dashboard you can choose to automatically pay back into and buy more PBs now but don't know if the same was the case going further back.

@JHA854 3 месяца назад

That is sad. If you got even 5% on that each year and reinvested, you'd be looking at over £6000.

@DaveWarlow 3 месяца назад

@@Al_Does_Stuff yeah, I've got the original paper documents from when my Gran bought them for me. It's the original amount.

@DaveWarlow 3 месяца назад

@@JHA854 that's exactly what I said that to my dad when I cashed out. Based on my experience alone I couldn't recommend Premium Bonds to anyone.

@Al_Does_Stuff 3 месяца назад

@@DaveWarlow that does suck then I wonder a little if they've managed to computerise everything entirely successfully at times. It must be a headache having damn near 70years of info with a huge amount of it having been transferred from paper copies

@charlesjones7404 3 месяца назад

Love your vids & PB's . Win a bit most months & do get upset when I don't get anything. For a " gambler" like me, they are great. A win win. My pension is just into the lower tax bracket, but I've heard on top of your personal allowance (£12570 ), there is a starting savings rate ( £5000 ), which, with the personal savings allowance ( £1000 ) = £18,570 before paying tax? Can you verify & if so, mention it when explaining tax implication on low income earners. Keep up the good work.

@michaeltang6290 3 месяца назад

There is also the psychological element that encourages people to save. The payout may be nothing but the value not burning the cash has value, what that exactly is is difficult to ascertain.

@Zrinq 3 месяца назад

I treat them as a bit of fun each month. I even get excited if the doorbell rings around the end of the month, thinking it might be the Premium bond man/woman. Plus, we open the prize app on 2nd day of each month to see what prizes my partner and have won and celebrate. In June we won over £1000 and between us average about £250p.m in the past year. I know full well the prize rate will decrease, but are fine with PBs atm. I never get excited about getting the guaranteed interest in my other accounts.

@Temuisawesome-eq2tl 3 месяца назад

Excellent video as always! I do love premium bonds but I am considering moving my money into a savings account, Three of my family members won nothing this month and pretty sure they have the full holding! Also out of curiosity when you phoned customer services was the first answer a AI chatbot?

@andrewyoung5126 3 месяца назад

I’ve maxed out on premium bonds as my emergency fund. My money isn’t at risk, I get quick access to it if I need it like if I lose my job or my boiler explodes, etc. it gets more return than my savings account and there’s always the chance of a decent win. I don’t class it as an investment. I have a pension and isa account for that. In 33 draws, I’ve failed to win a prize on 4 occasions. I’ve averaged 5.2% overall.

@randlerobbertson8792 3 месяца назад

An excellent piece Damien. Insightful and well explained. Against logic I'm keeping mine for the thrill born of uncertainty, and what if.

@juliancoulden1753 3 месяца назад

Thank you! Fascinating analysis. After that I think I will put money into a high interest savings account. And forget PBs

@DamienTalksMoney 3 месяца назад

Glad you found it useful!

@markoutram001 3 месяца назад

Great breakdown of premium bonds, the ending was hilarious

@domdomjamesterry4378 3 месяца назад

Which LISA do you use? Couldn't find it in the links, looking to set one up. Thank you.

@Jason-np2bp 3 месяца назад

Damien, I really liked this video; I genuinely learned a significant amount. I thought the way you constructed the argument was really good. Keep it up!

@DamienTalksMoney 3 месяца назад

Thank you!

@jackstar3653 3 месяца назад

This is really well created. Editing is spot on

@jamessmithson-br7rm 3 месяца назад

Good to know that I have better than average great luck. I love Premium Bonds.

@BRNN- 3 месяца назад

As a young person just starting out my savings/ investment journey is this something I should be saving into or should I start off with S&S ISA’s going into index funds? Any advice would be greatly appreciated!

@TomARowly 3 месяца назад

Not for the individual - but great for the government

@TheCompoundingInvestor 3 месяца назад

Fascinating level of detail and so well presented. Excellent video. All the best Damien.

@ilikeboringthings9 3 месяца назад

Premium Bonds = Middle-class Lotto

@JohnBeeblebrox 3 месяца назад

Not a fair comparison? You don't get your stake back with lotteries...

@reggie5495 3 месяца назад

@@JohnBeeblebrox It's a fair comparison. It's still a lottery; you're just gambling with the interest.

@jamessmithson-br7rm 3 месяца назад

It’s like a lottery but just not for chumps, you get entered into a draw every month and can always redeem your initial capital/ amount paid for a ticket.

@FA9082 3 месяца назад

I once dated a girl who advised me to put my savings in premium bonds and I literally had to stop myself from laughing in her face when she said it 😂

@navarios1 3 месяца назад

Stick 50k in & achieve average or below average winnings & the tax free aspect is actually relatuvely attractive (assuming you are already using up your yearly savings income tax free allowance) This is pretty much the main selling point though (beyond the offchance of winning big)

@3xWoody 3 месяца назад

That was very good. Well done! The idea of bonds vs lottery is worth considering but generally I've always considered them a scam. The longer you hold the bonds the more money you lose vs an interest paying savings account...UNLESS you're very lucky!!

@intruder313 2 месяца назад

I used to work there - it's a secure but not secret location. One thing you did no pickup on now is that the majority of low prizes are actually £50 or £100 now. The figure you gave for total PB I think is actually the total invested in all NS&I Products (at one point about 14) and another reason people pile money into these is that it's all covered by the Treasury, not just the first £85K. 'Anyone rich and famous' you can think of has about £4m invested with NS&I (the max across the various products at the time).

@richy5314rp 3 месяца назад

I agree completely it’s not an investment and with inflation you lose a little but I still do it. Have you done a video on trading 212? They pay interest on any uninvested cash but your money is invested in a financial product so doesn’t get the fscs financial protection. I opted out

@SkeletonDrums1 3 месяца назад

Ive had my house fund parked in there for 2 years now. 22-23 i got a 4% return and 23-24 i hit 8%, so im pretty happy! Only ever had a couple of months with no prizes at all and most the time i've had a couple of hundred quid.

@MrDuncl 3 месяца назад

One of the Premium Bond leaflets had a great summary on the front. "Win £1,000,000. Your money back if you don't."

@DarrenSmith-tq2xz 8 дней назад

Your capital is becoming worth less and less

@MrDuncl 8 дней назад

@@DarrenSmith-tq2xz But not as less as a non ISA savings account and even less less than a stack of £20s. Yes you could have invested the money in Nvidia or FTX. Hard to choose isn't it ?

@DarrenSmith-tq2xz 8 дней назад

@@MrDuncl no one is talking about counterparty risk at the moment and having capital in the bond markets is a risk of going broke its up to you what you do with your capital just remember that it is at risk if the other party defaults and when this happens in my opinion based on facts then no one can complain about it and say that they weren't worned all stock markets are way over valued and we will see a 80 percent correction at some point and then they will be gunning for people who told them it was safe and sound look at the global debt it can never be paid back have you heard of the dod Frank act if you haven't I surgest you Google it

@scubadave32 3 месяца назад

Can’t believe you came all the way to Blackpool just to film that bit 😂 hope you did something else before you went back if I’d have known I’d have put the kettle on just over in Thornton here. 👍🏼

@supersuede91 3 месяца назад

If the Bank Rate is above the rate of both CPI and Core inflation, and you want risk-free gains, then you should max out your personal savings allowance (if you have one), then max out a Cash ISA, and then max out your Premium Bonds - every year, in that exact order.

@MrDuncl 3 месяца назад

The problem is that there is a feedback loop in the personal savings allowance. Hence me changing the amount I pay into my pension AVC twice this year.

@stevea7021 3 месяца назад

Exactly why I hold £50k of them Damien. Glad you didn't condemn purely on the rates like some do!

@bonse1 3 месяца назад

I dont feel like people use premium bonds as a "serious" investment. They do it for easy no risk (realistically) "fun" with emergancy access if required.

@erolhassan5346 3 месяца назад

You have shed some light this this topic. Thank you

@willp1979 3 месяца назад

It still makes sense to save some money in an ultra safe place even if it doesn’t outrun inflation (emergency fund to avoid even more expensive debt), and premium bonds are perfect for this, with a very small chance of a massive prize!!

@STORMCLOUDGREY 3 месяца назад

Aaaah - ERNIE! Thanks for reminding me how good those early Madness albums were.

@Kl3mzwero 3 месяца назад

And to Damo's videos I say... Alright alright alright!

@DamienTalksMoney 3 месяца назад

HAHA YES! love this.

@johnmunro4952 3 месяца назад

Lotto= idiot tax

@denisepike9457 3 месяца назад

Great video as ever. I agree and wouldn’t do Premium bonds or the Lottery personally, but a point to think about perhaps is that much of the lottery ticket money goes to charity, PB’s do not. If somebody moves from that to PB, I’d try and also give something to charity or community elsewhere. A video on building wealth and giving back would be great sometime as it’s not covered enough. It was really good to hear that it is part of your long term plan during your recent life update video 👍.

@hugslugs 3 месяца назад

Had £300 for 15 years, never won a penny so cashed out and parked it somewhere with more predictable returns.

@SS-vz9iv 3 месяца назад

I've held them when the interest rate was 0.1% and over 10 years it paid out 1% a year as an average. I also went over 12 months at a time without a prize. Now you can get better returns elsewhere so they aren't there anymore. Good for easy access piggy bank with a few go on a lottery each month. Not an investing stratagy though, and maybe i should have done that but until finding Damien and also wanting the easy access/ not being in a position to lock up the money long term I didn't consider investment. I think PBs have a place but they aren't the one and only as many people who are financially uneducated may believe.

@robertsmith4830 3 месяца назад

Since my premium bond total went above £10,000 my average annual winnings have been just over 5% p.a. I've won £250 once, but all other winning numbers have been £100 or less although it's not unusual for two or even three numbers to win £25 in a given month. I consider it sensible to have some diversification in my cash holdings which is why I own premium bonds, but I do not expect I'll ever get close to having the maximum of £50k invested (and I never considered I'd get close to £30k when that was the limit).

@Motortriker 3 месяца назад

Very clever video. Love this entertaining way of delivering (what some may think of as) dry content. Nice work

@phesho 3 месяца назад

My "rainy day" savings are in Premium bonds. No more, no less. Pretty much instant access and a possibility of winning makes it an attractive option for me.

@kevinu.k.7042 3 месяца назад

A very good video - Thanks I've always wondered about this.

@user-vq2bj4in1r 3 месяца назад

Never done the lottery as always seen it as a way of paying more tax. Premium Bonds were great after I had to come out of pension fund due to LTA rules and maxed out ISA. Rate is comparable to good savings, your money is safe and there is a chance... I am biased as I got lucky and won £50K last year. So my annual return was over 100%

@tectoramia-sz1lu 3 месяца назад

My wife and I both have the maximum PB holdings, and have done quite well. Winning something most months. Winnings are paid straight into our bank accounts.

@DavidRed2 3 месяца назад

Over the last 12 months my NS&I maximum holding Annual Percentage Rate was 2.4% tax free. My wife’s APR is 4.1% tax free. It is FUN. My 2 Stocks&Shares ISAs are returning 17% & 18.9% but just aren’t as much fun.

@jablot5054 3 месяца назад

I hold £50k but i don't treat them as an investment. I just like winning something each month, with the chance of £million. Its just for fun.

@andrewcarter7503 3 месяца назад

Probably not a good investment. But if you're self employed or someone who (like me) gets most of their income from dividends, it's not a bad place to use as a "tax reserve". Putting money aside that you know you'll have to pay to the taxman eventually. So, not as a saving strategy but so you don't get a tax bill you can't pay.

@Timingp 3 месяца назад

I don't know about others but I have definitely got a better rate of return from premium bonds, than I would have if I had kept it in the bank.

@chrisgreenwood271 3 месяца назад

We tried PB last year, one year later the PB return out did our ISA's, which had a fixed rate of 2.8% the return from PB was equal to our current ISA rate of 4.1%

@Harry-TramAnh 3 месяца назад

You should be able to get a better rate on your ISA than that.

@davidbaker4614 3 месяца назад

Nicely done Damien, informative with a hint of humour. Hadn't thought of using them as a tax efficient emergency fund expansion

@0u70fSync 3 месяца назад

I had some premium bonds bought for me as a child. When I was old enough to open a kids bank account which paid a good rate of interest, I cashed out my bonds and put them into the account. I think to date, that's been the best "investment decision" I've ever made. Premium bonds are only worth thinking about for people who have more cash than they know what to do with, i.e. they can max out their premium bonds and just leave it there. The point being that the money is safe and any "winnings" are free of tax.

@anterosLondon 3 месяца назад

I love Premium Bonds. It motivated me to start savings, let's remember how important this is. TO SAVE and not SPEND. When we spend the money usually it is 100% loss. If Premium Bond and the hope to win is more motivating than a guaranteed little something, then PREMIUM BOND as the best thing EVER. There is no other investment which makes me so excited that the second working day of the month is here and I can check if I won or not🙂 Thanks for another good video Damien.

@helder869 3 месяца назад

Those bonds are tax free which makes a good difference. And people love positive skewed investments. That's the same reason people prefer lottery like stocks (growth) over value stocks

@timhulme6103 3 месяца назад

Back in the 1990s when I dabbled with Premium Bonds I read a notice in the local Post Office that stated that the premium bond total prize fund as a percentage was calculated based on the the LIBOR rate (not the BoE bank rate which some people might have assumed at the time). Usually the BOE rate and LIBOR whilst not always the same fluctuated within a small margin so it was of no real consequence. Then the GFC hit in 2008/9. I noticed that the prize rate percentage was quickly slashed like the BoE rate. However the LIBOR continued to hold up at around 5%, This struck me as odd seeing as I remembered what I read all those years earlier. If my memory has not failed me here, I have long suspected that the link between a benchmark interest rate and prize amounts was quietly ditched a long time ago and bond holders have been right royally ripped off ever since. No, I don't intend to put my money into PBs.

@MrDuncl 3 месяца назад

That might be true, but Premium Bonds were better than the majority of savings accounts.