Article preview: With interest rates remaining low, savers who want the security of cash and the prospect of higher returns will often ask us about Premium Bonds from National Savings & Investment (NS&I). Premium Bonds offer holders the chance to win prizes that free of UK Income Tax and Capital Gains Tax. The prizes are calculated based on an effective interest rate of 1.4%, with the odds of each individual Premium Bond number winning any prize currently 24,500 to 1. Of course there is no guarantee that your tax-free winnings from Premium Bonds will be equivalent to this effective interest rate; some savers win nothing at all (!), less than the interest rate or much more.
Changes to Premium Bonds to encourage savers
This 539 word blog post explains the reduction to the minimum investment for Premium Bonds, from £100 to £25, introduced at the start of the month. It also describes a proposed change allowing adults to purchase Premium Bonds for any under 16. Includes expert comments from Ian Ackerley, Chief Executive at NS&I and Michael Mercieca, CEO of the financial education charity Young Money. Written on 3rd February 2019.
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