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.


Other News

Expats with regular savings encouraged by new buy-to-let offerings

Terraced HousesGood news for UK expats with regular savings; lenders are introducing more buy-to-let mortgages specially designed to provide for the needs and circumstances of British expats. Until now there has been a shortage of viable deals, despite the fact that demand has been, and continues to be, strong.

Surprisingly, it is not expats from traditional destinations such as France and Spain who are likely to be the main customers of the buy-to-let deals. The United Arab Emirates and Dubai are reported to be the major markets for UK expat buy-to-let mortgages.

However, the mortgages will not be available to all expats. For example, expats resident in Australia, South Africa, Kenya and 89 other countries will be ineligible to borrow from the main provider, Skipton, and as such will have to look elsewhere before using their expat regular savings to make a buy-to-let investment.

Read More

Norway’s high cost of living off-set by its perks

Bergen, NorwayNorway is well-known for its high living costs. The Nordic country is one of Europe’s most expensive countries in which to live, with property and food prices much higher than the UK.

But exactly how much more expensive is everyday living? According to figures from Numbeo, the cost of living is 48.5% higher than the United Kingdom, with rent almost 15% higher and consumer prices almost a third higher. And if you’re a fast food fan, The Economist’s Big Mac Index 2017 revealed that Norwegian’s pay the second highest price in the world for the burger.

Read More

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