Premium Bonds ‘not guaranteed return’ says expert
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When it comes to savings accounts, Premium Bonds are a popular option because they offer the chance of winning the £1million jackpot. However, Britons may be better investing their hard earned money elsewhere.
Currently, they offer an interest rate of one percent which could easily be beaten elsewhere.
Some financial experts believe Britons would be better off investing their money in other places.
Founder of Equilibrium Financial Planning, Colin Lawson recently suggested Britons end their “love affair” with NS&I Premium Bonds.
He said that savers who bought the maximum £50,000 in Premium Bonds 25 years ago had instead invested in a basket of global equities, they would now have a pot worth £418,938.
He added: “Ask any financial planner if Premium Bonds are a good investment, and you would get a resounding ‘no’.”
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Financial journalist Martin Lewis has also tackled this question recently.
On the Money Saving Expert website it stated: “The nearest thing Premium Bonds have to an interest rate is their annual prize rate, currently one percent.”
Although the chance of winning is better than the lottery, there’s no guarantee people will win anything at all.
Mr Lewis suggested Britons weigh up their options before deciding whether this is a viable option for them.
Meanwhile, there is currently £74million in unclaimed Premium Bonds prizes.
Although NS&I contacts all winners, sometimes this is impossible if they’ve moved and not updated their address.
Anyone who has previously bought Premium Bonds should check if they’ve won as the money will not be lost.
People can use the prize checker tool on the NS&I website to see if they have any unclaimed prizes.
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Alternatively they can download the NS&I prize checker app for Google or Apple – or ask Alexa.
The NS&I website said: “You never need to worry about an unclaimed prize.
“We’ll hold on to it until you get in touch with us.”
The next Premium Bonds prize draw will take place on Friday April 1.
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