Are Premium Bonds A Good Investment?

Рет қаралды 162,564

Күн бұрын

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

Пікірлер: 683

@DamienTalksMoney 4 ай бұрын

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 4 ай бұрын

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

@Jalleur14325 4 ай бұрын

Gold

@LR_Jordan 4 ай бұрын

Uranium

@azharsheikh8337 4 ай бұрын

Gold&Silver please. Thanks. Love your videos.

@guydudley 4 ай бұрын

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.

@VegasMilgauss 4 ай бұрын

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 4 ай бұрын

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

@thejudge2352 4 ай бұрын

Agreed.

@tommyb8202 4 ай бұрын

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 4 ай бұрын

A cash ISA is tax free too...

@slabbygabby 4 ай бұрын

What looollll. Have you maxed out your sipp and isa

@markmahood3093 4 ай бұрын

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 4 ай бұрын

Exactly the same reasons as myself. 🙂

@logosg 4 ай бұрын

😂

@anterosLondon 4 ай бұрын

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

@marcse7en 3 ай бұрын

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 ай бұрын

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

@AliBapcyk 4 ай бұрын

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

@DamienTalksMoney 4 ай бұрын

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 4 ай бұрын

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

@AliBapcyk 4 ай бұрын

kzfaq.info/get/bejne/eNaCjbaBs8C9Z6s.htmlsi=fRtAF5kFv_JMAI8K “Because sometimes, it’s really hard to actually do your own ideas” 😄

@randomallan3724 4 ай бұрын

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

@repentmaster2842 4 ай бұрын

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 4 ай бұрын

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 4 ай бұрын

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 4 ай бұрын

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 4 ай бұрын

@@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 4 ай бұрын

@@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+

@seanwalsh168 4 ай бұрын

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 4 ай бұрын

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

@slabbygabby 4 ай бұрын

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

@Yorkshiremadmick 3 ай бұрын

Plus you still have £1125 cash 💴

@seanwalsh168 3 ай бұрын

@@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

@drfurbz 4 ай бұрын

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

@adamp6320 4 ай бұрын

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.

@user-hm7kq7lz9l 4 ай бұрын

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.

@IssieAndLife 4 ай бұрын

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.

@Nates33 4 ай бұрын

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!

@progress2success402 4 ай бұрын

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 😉

@oph1066 4 ай бұрын

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

@d0m96 4 ай бұрын

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

@DamienTalksMoney 4 ай бұрын

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

@scoobydoo12ism 4 ай бұрын

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💯👍🏻

@ademcguinness8132 4 ай бұрын

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 4 ай бұрын

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 ай бұрын

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.

@ProfoundFamiliarity 4 ай бұрын

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!

@christines5430 4 ай бұрын

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 .

@paulm6742 4 ай бұрын

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.

@nickceppi3553 4 ай бұрын

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 4 ай бұрын

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 4 ай бұрын

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

@Jalleur14325 4 ай бұрын

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.

@DaveWarlow 4 ай бұрын

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 4 ай бұрын

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 4 ай бұрын

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

@DaveWarlow 4 ай бұрын

@@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 4 ай бұрын

@@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 4 ай бұрын

@@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

@MarkHanna824 4 ай бұрын

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!🧡

@darylbultitude3786 4 ай бұрын

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

@LEWIS1992 4 ай бұрын

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

@Me-ll4ig 4 ай бұрын

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 4 ай бұрын

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 4 ай бұрын

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.

@lyracian 4 ай бұрын

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 4 ай бұрын

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 ай бұрын

@@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 21 күн бұрын

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 4 ай бұрын

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 4 ай бұрын

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

@Waddywoos360 4 ай бұрын

@@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!

@jamesbarry1739 4 ай бұрын

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 4 ай бұрын

Have you considered a LISA?

@jamesbarry1739 4 ай бұрын

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

@TomARowly 4 ай бұрын

Not for the individual - but great for the government

@diddly206 4 ай бұрын

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 4 ай бұрын

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 3 ай бұрын

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

@merdoca2358 4 ай бұрын

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

@MoneyGist 4 ай бұрын

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

@laurelharper123 2 ай бұрын

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

@Ken_H_ 4 ай бұрын

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.

@harrisonshaw513 4 ай бұрын

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.

@gordon861 4 ай бұрын

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.

@georgeacres4 4 ай бұрын

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

@DamienTalksMoney 4 ай бұрын

💁🏼‍♂️

@MaxwellBoulton 4 ай бұрын

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

@roberthuntley1090 4 ай бұрын

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 4 ай бұрын

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

@Al_Does_Stuff 4 ай бұрын

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 4 ай бұрын

@@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 4 ай бұрын

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 ай бұрын

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

@randlerobbertson8792 4 ай бұрын

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

@stevegeek 4 ай бұрын

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 4 ай бұрын

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

@MWR1990 4 ай бұрын

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

@mattsennett 4 ай бұрын

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 4 ай бұрын

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

@markwilliams4274 3 күн бұрын

Do your winnings compound over the years or are you forced to cash out your winnings.

@mattsennett 3 күн бұрын

@@markwilliams4274 If you hold the maximum £50k you have to take the winnings. If you hold less than that you can build your bond total or take the winnings.

@liamwalsh75 4 ай бұрын

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.

@erolhassan5346 4 ай бұрын

You have shed some light this this topic. Thank you

@garybenn9482 4 ай бұрын

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.

@jackstar3653 3 ай бұрын

This is really well created. Editing is spot on

@Armadyllo 4 ай бұрын

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

@dondarkblade1460 4 ай бұрын

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 4 ай бұрын

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

@markoutram001 4 ай бұрын

Great breakdown of premium bonds, the ending was hilarious

@Narky 4 ай бұрын

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.

@ilikeboringthings9 4 ай бұрын

Premium Bonds = Middle-class Lotto

@JohnBeeblebrox 4 ай бұрын

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

@reggie5495 4 ай бұрын

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

@jamessmithson-br7rm 4 ай бұрын

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 4 ай бұрын

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 4 ай бұрын

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)

@TheCompoundingInvestor 4 ай бұрын

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

@juliancoulden1753 4 ай бұрын

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

@DamienTalksMoney 4 ай бұрын

Glad you found it useful!

@richy5314rp 4 ай бұрын

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

@CharlesRWJones 4 ай бұрын

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.

@kevinu.k.7042 4 ай бұрын

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

@jamessmithson-br7rm 4 ай бұрын

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

@asmith9140 3 ай бұрын

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

@4444aliraza 4 ай бұрын

This is what I needed to hear. Thanks for taking it the extra mile!

@michaeltang6290 3 ай бұрын

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.

@Jason-np2bp 4 ай бұрын

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 4 ай бұрын

Thank you!

@oliverjamesspicer 4 ай бұрын

Fantastic video. Love the clips from the 60s etc

@scubadave32 4 ай бұрын

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. 👍🏼

@andrewyoung5126 4 ай бұрын

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.

@Zrinq 4 ай бұрын

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.

@andrewcarter7503 4 ай бұрын

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.

@Motortriker 4 ай бұрын

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

@SkeletonDrums1 4 ай бұрын

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.

@135eddy 4 ай бұрын

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

@Temuisawesome-eq2tl 4 ай бұрын

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?

@Josh-ek9pw 4 ай бұрын

Great video! Nice to see you out and about for a change

@justlisten82 4 ай бұрын

Keep up the great work Damien! Thanks for the work you do. Enjoy your Sunday.

@hugslugs 4 ай бұрын

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

@SS-vz9iv 4 ай бұрын

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.

@Balancing.The.Budget 4 ай бұрын

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! 😂

@Life_Literacy 4 ай бұрын

Great video Damo… looking forward to the series of videos 👍🏻

@bonse1 3 ай бұрын

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.

@Timingp 4 ай бұрын

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.

@Kl3mzwero 4 ай бұрын

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

@DamienTalksMoney 4 ай бұрын

HAHA YES! love this.

@johnmunro4952 4 ай бұрын

Lotto= idiot tax

@supersuede91 4 ай бұрын

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 4 ай бұрын

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.

@intruder313 3 ай бұрын

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).

@DavidRed2 4 ай бұрын

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.

@tectoramia-sz1lu 3 ай бұрын

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.

@willp1979 4 ай бұрын

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!!

@robertsmith4830 4 ай бұрын

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).

@stevea7021 4 ай бұрын

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

@benj6244 4 ай бұрын

Great vid Damien. My in laws have used them for years and always felt like they were just a "feeling" of saving well because of those notifications.

@davidbarclay54 4 ай бұрын

Good place to park cash with instant access and no tax implications. Sometimes convenience is more important than scraping every last drop of interest.

@TopazDr 4 ай бұрын

Can you do investment trusts and hedge funds next? Love your content

@STORMCLOUDGREY 4 ай бұрын

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

@phesho 4 ай бұрын

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.

@davidbaker4614 4 ай бұрын

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

@MrDuncl 4 ай бұрын

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 21 күн бұрын

Your capital is becoming worth less and less

@MrDuncl 21 күн бұрын

@@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 21 күн бұрын

@@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

@thepropertyflipper 4 ай бұрын

The unseen impact of inflation over the long term makes premium bonds unnatractive, until you look at the alternatives. It's so difficult to build wealth long term in this country unless it's in a pension or ISA wrapper.

@jonbeckwith4842 4 ай бұрын

Great video thanks Damien, food for thought!!

@cad4246 4 ай бұрын

Savings are not just for future consumption. They are also for peace of mind, e.g. so that you can cover an unexpected cost. For many, this is worth paying a small %