Contact

News & Insights

Premium Bonds or Premium Rip Off?

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.

Other News

Britons stash over £1bn at home as interest rates on savings dwindle

I read an interesting report this week that brought a smile to my face.  It appears that over seven million Britons stash cash away in their homes, with around £1.3 billion languishing in spots such as piggy banks, teapots and even freezers. Drawn by the convenience of having cash to hand and dismayed by dismal interest rates, British adults are squirrelling away sizeable sums at home, it has been reported. 

Only 27 per cent said they were happy with the interest rates accruing on their savings, with many adults saying their children now save more in bank accounts than they do. On average, people said they would need to be able to generate at least £120 in additional interest a year to be persuaded to move their money.

Read More

What are the government stimulus packages and what do they actually mean?

Keith LittlewoodDuring these unprecedented times the Corona Virus pandemic has impacted so many lives in so many ways.  The fact that every country in the world is affected and having to take measure to help support their economy will have such profound long-term consequences that governments are forced to take actions never before seen.  You have probably seen the headlines: Australia pumping $66Billion into their economy, Spain €200 Billion, UK £500 Billion, USA $2Trillion, the list goes on.

Read More

Select your country

Please select your country of residence so we can provide you with the most relevant information:

You are currently viewing the Blacktower Financial Management EU website.

You may be looking for the Blacktower United States website.

Blacktower United States > X Stay on this site

Or choose your country.