Premium Bonds - ISA? Savings Bonds Instead?
Discussion
All, I’ve had premium bonds for many years. It was a safe bet, and I’m not too sure about investing money. I’ve had a fair few wins, but with interest rates now rising, I think I might be better investing in other things.
I don’t have an ISA, so I guess £20k in some kind (stocks & shares perhaps), should be a no-brainer, but what about the rest? Fixed-rate bonds? I’m pretty risk averse.
In theory I’ve got about 15 years left to work, and have a work pension. I’m thinking I need to make a decision soon.
I’ve been to a couple of financial advisors in the past, but all they wanted to do was sell me their ‘products’ whereas what I was really after was advice on the best options for investing.
Thanks.
I don’t have an ISA, so I guess £20k in some kind (stocks & shares perhaps), should be a no-brainer, but what about the rest? Fixed-rate bonds? I’m pretty risk averse.
In theory I’ve got about 15 years left to work, and have a work pension. I’m thinking I need to make a decision soon.
I’ve been to a couple of financial advisors in the past, but all they wanted to do was sell me their ‘products’ whereas what I was really after was advice on the best options for investing.
Thanks.
Edited by dr_gn on Monday 5th August 08:24
Hopefully not sounding too condescending... But I think a beginners guide to ISAs would do you well. Possibly on moneysavingexpert, or I'm a fan of the monevator site.
This isn't comprehensive but to help you on the way (obviously I don't know your age, investment goals, whether you're a billionaire or a pauper, etc etc)
Premium bonds are an odd choice for a long term investment strategy. Really the only reason to own them is for 'fun' or to have a safe holding that is free from tax in contrast to saving accounts (or you're some weirdo altruist who wants to loan the gov money at cheap rates).
ISAs are tax shelters, so I can't personally think of any reason to own premium bonds before using up your ISA allowance. ISAs are a 'wrapper' and you can put all kinds of different investments in them; from very safe cash ISAs which pay interest like a normal savings accounts, through stocks and shares ISAs, to more bonkers innovative finance ISAs.
You can put a max of £20k in an ISA every financial year. So it would take a few years to move your investments over.
In the nicest possible way, your IFAs were prob right. Investing in premium bonds over 15 years at the expense of building up an ISA is very likely to be a mistake. Unless you've been very lucky!
This isn't comprehensive but to help you on the way (obviously I don't know your age, investment goals, whether you're a billionaire or a pauper, etc etc)
Premium bonds are an odd choice for a long term investment strategy. Really the only reason to own them is for 'fun' or to have a safe holding that is free from tax in contrast to saving accounts (or you're some weirdo altruist who wants to loan the gov money at cheap rates).
ISAs are tax shelters, so I can't personally think of any reason to own premium bonds before using up your ISA allowance. ISAs are a 'wrapper' and you can put all kinds of different investments in them; from very safe cash ISAs which pay interest like a normal savings accounts, through stocks and shares ISAs, to more bonkers innovative finance ISAs.
You can put a max of £20k in an ISA every financial year. So it would take a few years to move your investments over.
In the nicest possible way, your IFAs were prob right. Investing in premium bonds over 15 years at the expense of building up an ISA is very likely to be a mistake. Unless you've been very lucky!
ILikeCake said:
Hopefully not sounding too condescending... But I think a beginners guide to ISAs would do you well. Possibly on moneysavingexpert, or I'm a fan of the monevator site.
This isn't comprehensive but to help you on the way (obviously I don't know your age, investment goals, whether you're a billionaire or a pauper, etc etc)
Premium bonds are an odd choice for a long term investment strategy. Really the only reason to own them is for 'fun' or to have a safe holding that is free from tax in contrast to saving accounts (or you're some weirdo altruist who wants to loan the gov money at cheap rates).
ISAs are tax shelters, so I can't personally think of any reason to own premium bonds before using up your ISA allowance. ISAs are a 'wrapper' and you can put all kinds of different investments in them; from very safe cash ISAs which pay interest like a normal savings accounts, through stocks and shares ISAs, to more bonkers innovative finance ISAs.
You can put a max of £20k in an ISA every financial year. So it would take a few years to move your investments over.
In the nicest possible way, your IFAs were prob right. Investing in premium bonds over 15 years at the expense of building up an ISA is very likely to be a mistake. Unless you've been very lucky!
Thanks, yes I understand how ISAs work. In the past, interest rates were very low, so it didn’t seem to make much difference whether the savings were in PBs or a savings account. Now things have changed, and I’ve got more savings, I need to invest in things that will give me a decent return over the next 15 years or so. Also need to bear in mind things like kids university expenses and of course emergency fund for house repairs, cars etc. standard stuff I guess. This isn't comprehensive but to help you on the way (obviously I don't know your age, investment goals, whether you're a billionaire or a pauper, etc etc)
Premium bonds are an odd choice for a long term investment strategy. Really the only reason to own them is for 'fun' or to have a safe holding that is free from tax in contrast to saving accounts (or you're some weirdo altruist who wants to loan the gov money at cheap rates).
ISAs are tax shelters, so I can't personally think of any reason to own premium bonds before using up your ISA allowance. ISAs are a 'wrapper' and you can put all kinds of different investments in them; from very safe cash ISAs which pay interest like a normal savings accounts, through stocks and shares ISAs, to more bonkers innovative finance ISAs.
You can put a max of £20k in an ISA every financial year. So it would take a few years to move your investments over.
In the nicest possible way, your IFAs were prob right. Investing in premium bonds over 15 years at the expense of building up an ISA is very likely to be a mistake. Unless you've been very lucky!
Might make an appointment with a local accountant’s advisor and see what they say.
Not being rude, but you’ve come to this a it late, just as it’s likely that cash rates are going to drop.
There’s a saving interest rate thread on here, go have a look. https://www.pistonheads.com/gassing/topic.asp?h=0&...
Monevator is an excellent site, some great information on there. Cash for the long term is a bad idea, although safe if you discount inflation.
A S&S ISA with sane index trackers would be a good place to start, some cash is a good thing to hold though so not all of it.
There’s a saving interest rate thread on here, go have a look. https://www.pistonheads.com/gassing/topic.asp?h=0&...
Monevator is an excellent site, some great information on there. Cash for the long term is a bad idea, although safe if you discount inflation.
A S&S ISA with sane index trackers would be a good place to start, some cash is a good thing to hold though so not all of it.
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