How much do you save into Premium Bonds?

[MsGiGi]

My Cash ISA bonus interest rate expired this month, so I deposited my Emergency Fund into Premium Bonds instead.

I have £2,950 in there at the moment and I save £27 of my wage each month into PBs.

What about you?

People have explained very clearly the circumstances in which PBs make sense. The likelihood of someone with full holdings not winning a prize in a given month is about 1 in 10, so it happens but not very much. You can work out from that how unbelievably unlikely it is never to win with full holdings. (For example, likelihood of not winning in 6 months is one in a million.)

I wouldn't keep it in cash. I would be investing it. Having £50,000 sitting in cash being eroded by inflation is absolutely crazy for me. I keep under 10k in easily accessible cash. E.g a savings account with as high an interest rate as I can get that allows up to 3 or 4 withdrawals a year without impacting the rate. This is money intended to see me through an emergency such as boiler breaking, white goods needing replaced, large car bill etc. Proper long term savings are invested rather than being held in cash. Starting with maxing out a S&S isa each year if i can before anything else.Yes the stock market has its ups and downs but historically has always performed way better than cash savings or premium bonds. Even if you do have to pay some tax on the returns. I also pay in to a SIPP each year and AVCs via salary sacrifice to my workplace pension to reduce my tax liability.
I think what baffles me is the mindset of many in the UK that refuse to invest their money. I want my money to make as much as it can for me.
I do understand that much more education around financial matters is needed but to me it just seems such a shame that people could be getting much better value for their hard earned cash than they do with it sitting in a cash ISA or premium bonds at around 3%
Is not intended to sneer or have a dig. As a country we shout loudly when our employers offer us below inflationary or zero pay rises, rightly so. Why do we accept it for our hard earned savings. Thats all, as I say not intended to be a dig at anyone. I grew up in a household with 2 parents that were financially illiterate. They could barely budget for the basics like shopping, fuel, clothing or anything else. As an adult I decided to find out as much as I could about financial matters and it just sort of snowballed from there.

I had max holdings for a while and did very poorly. I’ve moved it all into an easy access savings account paying 4.75% which think is the best available at moment

I already have two paid for properties as well as maxed out ISAs. I don't want another property to be responsible for and I have 50k in investments on Trading. Maybe the 50k I have in PBs could work better for me elsewhere but it's very SAFE there and I can access it if I need it. I'm not going to lose it and I could win big on it. I am happy with my decision but I do see what you're saying. If it was all the savings I had, it would definitely be better elsewhere.

There is a thread on this and you can see what people win. DP has about £15k and wins most months - I think he said on average it works out the equivalent to 3% interest.

I had £650 in there and didn’t even check it anymore as I never won - had it for less than a year. Last month I won £1000 so, as they say… it could be you! I now have £2k in there and may add to it. My other money is in trading 212 or a Monzo isa

Can you recommend some please?

I doagree with you and i think we are really both saying the same thing in a different way. You have what's best for your circumstances.
I think my frustration comes from a lot of threads recently where the OP has unexpectedly come into some money and poster after poster advise them to stick it in premium bonds. It seems to be a default for some posters on here. If you go to the premium bonds thread there is poster after poster saying tbey have full holdings and so does their spouse and they haven't won anything in months. Or they are delighted with their £100 win. It feels like they are literally throwing their money away chasing a dream that in all reality is never going to happen for them.

Fill amount £50k and I won every month this last year. £1200

@Yolo12345have a look through the ones Martin Lewis recommends https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

Reading this thread makes me feel very poor indeed.

@MidnightPatrol It's 3.80% with Chip. I could do a little better elsewhere but I like the ease of Chip and have £4k in an easy access account with them paying 3.95% that I can access within five minutes.

I take the point you and others have made about better long-term returns in investing, but investing comes with risks and some of us are more risk averse than others. We'll see what Reeves does with the budget next month - if she really does reduce the cash ISA limit I'll either put that money into a SIPP or open up a S&S ISA.

But very tax efficient

My kids have premium bonds and two of them have won a grand each this year alone.

Should I move their money into ISAs?

It really depends on your circumstances, if its the only savings you have, PB are not a good idea.

If you have already maxed out ISA's, maxed out mortgage overpayment etc, it's the next place to squirrel away £50K.

Agreed.

It’s actually quite worrying, given people are seeking financial advice, that premium bonds or paying off your mortgage are the go-to strategies.

How much have they got?

But as a general rule, and if they don’t need the money for a long time, you should absolutely be investing the money for them within an ISA to try and outpace inflation.

Only if you have no savings interest allowance left, and have maxed out your £20k a year ISA allowance…!

If they won’t need access for quite a few years I’d go for a S&S isa. But not if they might need the money soon.

I've been on the PBs threads on here for two years. It's a mixed picture for those of us on FH and I would say that the returns for most of us are average. It's not just the tiny chance of winning big, it's that prizes are tax-free. I already pay enough tax! But having FH for years and having a terrible return like some people is something I can't understand.

They change all the time. I follow money saving expert and find signed up to tbeir newsletter. They list the top ones each week. At the moment I have one with Chase and one with Zopa. You may have to open current account to access some of them. E.g the Chase one I have is 4.74% interest for 1 year with 1% cashback on the current account for certain things. I use this account for all my petrol and food shopping and public transport travel each month. You can earn up to £15 a month cashback for a year. Thats an extra £180 a year for literally doing nothing other than transferring some money from my main current account to the Chase one.

Could you elaborate a bit on the mortgage payment element there, would you suggest not paying off a mortgage if you have the capital, but investing it elsewhere? If so do you see mortgage overpayment are ever a good idea, depending on where you are on the financial path so to speak? Thanks

I have an ISA. It's small- circa £2 k

I was spending a set amount of money each month in the lottery which was pointless. So I just set up a standing order for the same amount to PBs. That works for me. I have the anticipation of perhaps winning big but I don't lose my money as I did with the lottery which was just pissing money away.

That depends how much they have in premium bonds. Saying they won a grand dosen't tell us anything. What does that work out as a rate of return? If they have £1000 in premium bonds then a grand is a fabulous return. If they have full holdings then its crap. They also may not win again for 2 years. Children also cant invest as much per year in ISA savings as adults can. They are limited to £9000 a year.

Thts a very poor return for full holdings. It works out at 2.4% way below the average 3.8 that premium bonds tout as their equivalent rate.

Yes, i always say Mumsnet is the last place to go for financial advice. There is ao much wrong information spouted on here.