The average return for Premium Bond holders is currently 1.25% and is about to be cut to 1.15% from May 2017. This might sound OK in the current economic climate of low interest rates, but when you consider there are 2 prizes of £1Million paid out each month that are included in these averages you can understand why getting returns are becoming less and less frequent for the small £100 holders. The NS&I even admit that there is now only a 30,000-1 chance of getting a return for every £1 ticket (that is like Leicester City winning the premiership six times). Or in other words if you hold £30,000 you have a 50/50 chance of getting a return each month – and that will probably be only £25.
Recent disclosure and regulatory rules now mean that the website and literature the NS&I produce must tell you the following before investing:
Premium Bonds are not for savers who:
• want a regular income
• are looking for guaranteed returns
• are concerned about inflation eroding their savings
• want to buy them as a gift, unless for their child or (great) grandchild
If you want to gamble or speculate with a small amount £100 – £500 then I would say go for it. But if you are a serious investor and have somewhere near the now maximum allowed £50,000 I would strongly suggest shopping around to see what returns you can get for your money.
If you are resident in Spain, there are Spanish Compliant Bonds that can give you a much better average return than Premium Bonds are offering. Please do not let your money continue to erode in real terms. Be wise, it might be time to give Ernie the boot.
This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
Concerns that the triple lock system is on its last legs are not new. But while the 
ng home from the pub on a Saturday night (and I’m Glaswegian so I’m allowed to joke about things like that); I’m talking about 2016 and what faces each and every one of us this year – uncertainty. In fact, it could almost be classed as uncertain uncertainty. The key issue for British expats is obviously the UK referendum on 23rd June when the vote will be taken as to whether or not the UK will stay in the European Union.