The rate of return of course only describes the mean average return, indicating that for every £100 paid in to bonds, on average £1.25 a year is be paid out but not to everyone. With £1,000 saved you’ve a less than 1 in 3 chance they’ll beat a 1.45pc savings account, even with £50,000 in it’s at best 1 in 6. Alongside the falling rate the other factors that used to appeal are no longer quite so special. Since 6th April when the new personal savings allowance (PSA) launched all savings interest is automatically paid tax-free so the premium bonds tax advantage has gone. Also the unique safe haven Premium bonds have enjoyed as they were operated by NS&I and Treasury-owned keeping capital as safe as it gets has changed. These days all UK regulated savings accounts are protected up to £75,000 per person, per institution, by the Financial Services Compensation Scheme and the maximum you can put in premium bonds is £50,000.
Premium Bonds are certainly not as good as they used to be, but ultimately it’s only worth re-allocating your cash if there’s something better out there. If you want to try and find the best place to save your money Enable’s IFA’s can help look at the options.
Source: Money Saving Expert
Issued by: Enable Independent Financial Life Planners • 25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 - Fax: 01279 657339 Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority. It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us. NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE
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