Premium Bonds

[Dave2002]

I am - probably stupidly - sentimentally attached to my one premium bond - the paper certificate of which surfaces from time to time.

It is a one pound bond, bought over 50 years ago.

It would be good to buy more premium bonds, as the return on investment is quite good - but I'd really prefer not to have to lose that original bond.
This is about as stupid as people who have favourite lottery numbers etc., but is it possible to pander to my sentimentality within the rules, or should I just buy more bonds and frame the original as a memento of times past?

[vinteuil]

... why would buying more Bonds imperil your current one?

.

[Petrushka]

... why would buying more Bonds imperil your current one?

.

Indeed. You are allowed a maximum of £50,000 and can safely purchase another £49,999 where, assuming you can afford it, it could give you a greater chance of winning a major prize.

I've got a touch less than half of that in PBs and the maximum win I've had in six years is £1000, though it's mostly not more than £25/£50 per month.

It could be worth checking via the NS&I website to see if your £1 bond might have won something after all.

[oddoneout]

I am - probably stupidly - sentimentally attached to my one premium bond - the paper certificate of which surfaces from time to time.

It is a one pound bond, bought over 50 years ago.

It would be good to buy more premium bonds, as the return on investment is quite good - but I'd really prefer not to have to lose that original bond.
This is about as stupid as people who have favourite lottery numbers etc., but is it possible to pander to my sentimentality within the rules, or should I just buy more bonds and frame the original as a memento of times past?

If you buy more they don't replace your existing holding do they? When I had Premium Bonds they were bought over several decades and were separate holdings, with differing 'batch' numbers accordingly. I had to cash them in some time ago but I don't see why that would have changed.

[LMcD]

Indeed. You are allowed a maximum of £50,000 and can safely purchase another £49,999 where, assuming you can afford it, it could give you a greater chance of winning a major prize.

I've got a touch less than half of that in PBs and the maximum win I've had in six years is £1000, though it's mostly not more than £25/£50 per month.

It could be worth checking via the NS&I website to see if your £1 bond might have won something after all.

My mother had 100 and won £10,000. Unfortunately, the rules did not allow me to inherit them.
The main advantages of Premium Bonds are, of course, that your winnings aren't taxable and you can get your money back pretty quickly if you need to.
If you buy enough they can prove to be a regular, albeit modest, source of monthly income.

[Petrushka]

My mother had 100 and won £10,000. Unfortunately, the rules did not allow me to inherit them.
The main advantages of Premium Bonds are, of course, that your winnings aren't taxable and you can get your money back pretty quickly if you need to.
If you buy enough they can prove to be a regular, albeit modest, source of monthly income.

Despite reductions in the prize level over time, I still think that the winnings I've had are better than the interest rate available at most banks. It was this that attracted me to put a fair bit of my pension payout into them.

A couple of friends of mine each have the maximum £50,000 in and they nearly always get around £250 in winnings each month.

[Dave2002]

... why would buying more Bonds imperil your current one?

.

I don't know whether it actually would, though years ago when I tried to buy some I found I had to register an account with NS&I..
One question asked was whether I had ever had a bond before, to which the answer was "yes", but I couldn't provide the number at the time

As I think one is only allowed to have one account, the options were to ignore that original bond, and effectively start a new account, or not bother.

Consequently I didn't bother.

Some ISAs [though not all] deliver a better rate of return than premium bonds, but the top up each year is a max of £20,000.
Premium bonds should give around 4% pa. interest - though that may of course vary because of the way they work. It is allowed to invest up to £50,000 in the bonds, with any winnings paid or reinvested as tax free "earnings".

When interest rates were very, very low - some years back it was possible to invest in various savings accounts, without incurring any problems with tax and HMRC, as interest was likely to be below the personal tax limit threshold, and also in earlier years basic rate tax was paid out automatically on most savings accounts. However as the tax rules changed and also the interest rates eventually improved a few years ago [or maybe more, depending on one's circumstances] the interest returns gradually rose to the point at which they could go over the personal tax free limits. It's also possible that the tax free limits lowered too. The gradual changes could have resulted in a requirement to notify HMRC of any income outside the threshold and other rules.

Most of my working life I was paid wtihin a PAYE system, so did not concern myself with tax, and tax returns. Once or twice I did fill in the forms, and dealing with HMRC was a real pain, as they didn't seem capable of calculating the correct amounts anyway. I have better things to do than spend days doing spreadsheets, and then discussing them with the tax offices, so I prefer to avoid any investments which are not inherently tax free so as to ensure that I don't inadvertently [or even advertently!] fall foul of any rule changes which might affect me each year. So now I leave the calculations to the tax offices, based on my pensions - details of which they have, and the only significant interactions with HMRC I have had over the last decade have been for inheritance purposes and for moving house.

I prefer to keep things this way, though I understand that some people will have to fill in tax forms each year, so for them it may be worthwhile putting in the extra effort, or employing an accountant, to minimise their tax liabilities. My approach is to minimise any income due to untaxed investments, even if it means I don't maximise our overall household earnings. I don't need extra money and I'd really rather save the time and hassle which might arise if I start any new activities which would require me to spend time form filling, when I'd rather be listening to music, travelling, or doing almost anything else.

[Pulcinella]

It took about 15 minutes to file a self-assessment tax return yesterday.
I'd received the last interest statement I was waiting for (Santander), but had in fact added up the interest from monthly statements anyway so could have submitted earlier.
Yes, I keep a spreadsheet going through the year, but in my case it has details only of savings account interest and gift aid payments.

The only numbers I had to enter were:
Occupational pension (from the P60)
Taxed savings interest (the Halifax Reward scheme counts here)
Untaxed savings interest
Gift aid donations

State pension amount already filled in; it was slightly higher than what had appeared on my original notice of tax coding for 2024–2025, but I left it unchanged.
Hardly onerous, and you can quit and save whenever you like before submitting.
No ISA details required, of course.

And yes, I'm getting about 4% on my £50k of Premium Bonds.

[oddoneout]

I don't know whether it actually would, though years ago when I tried to buy some I found I had to register an account with NS&I..
One question asked was whether I had ever had a bond before, to which the answer was "yes", but I couldn't provide the number at the time

As I think one is only allowed to have one account, the options were to ignore that original bond, and effectively start a new account, or not bother.

Consequently I didn't bother.

Some ISAs [though not all] deliver a better rate of return than premium bonds, but the top up each year is a max of £20,000.
Premium bonds should give around 4% pa. interest - though that may of course vary because of the way they work. It is allowed to invest up to £50,000 in the bonds, with any winnings paid or reinvested as tax free "earnings".

When interest rates were very, very low - some years back it was possible to invest in various savings accounts, without incurring any problems with tax and HMRC, as interest was likely to be below the personal tax limit threshold, and also in earlier years basic rate tax was paid out automatically on most savings accounts. However as the tax rules changed and also the interest rates eventually improved a few years ago [or maybe more, depending on one's circumstances] the interest returns gradually rose to the point at which they could go over the personal tax free limits. It's also possible that the tax free limits lowered too. The gradual changes could have resulted in a requirement to notify HMRC of any income outside the threshold and other rules.

Most of my working life I was paid wtihin a PAYE system, so did not concern myself with tax, and tax returns. Once or twice I did fill in the forms, and dealing with HMRC was a real pain, as they didn't seem capable of calculating the correct amounts anyway. I have better things to do than spend days doing spreadsheets, and then discussing them with the tax offices, so I prefer to avoid any investments which are not inherently tax free so as to ensure that I don't inadvertently [or even advertently!] fall foul of any rule changes which might affect me each year. So now I leave the calculations to the tax offices, based on my pensions - details of which they have, and the only significant interactions with HMRC I have had over the last decade have been for inheritance purposes and for moving house.

I prefer to keep things this way, though I understand that some people will have to fill in tax forms each year, so for them it may be worthwhile putting in the extra effort, or employing an accountant, to minimise their tax liabilities. My approach is to minimise any income due to untaxed investments, even if it means I don't maximise our overall household earnings. I don't need extra money and I'd really rather save the time and hassle which might arise if I start any new activities which would require me to spend time form filling, when I'd rather be listening to music, travelling, or doing almost anything else.

As the scheme is subject to a maximum holding amount they would need to know about existing bonds to check that any new purchases wouldn't take you over that limit. I would think that if you couldn't provide the details at the time of application for new purchases they would be able to track them down, but obviously it saves time if you provide the details instead.

[oddoneout]

Despite reductions in the prize level over time, I still think that the winnings I've had are better than the interest rate available at most banks. It was this that attracted me to put a fair bit of my pension payout into them.

A couple of friends of mine each have the maximum £50,000 in and they nearly always get around £250 in winnings each month.

My mother had the (then) maximum holding of £20,000 and got something almost every month, often £250, but mostly at least £100 - and there were wins after her death during the period they could be left in the draw. She found the money useful for the small sums she liked to give her children and grandchildren throughout the year. She was surprised that I had had only a couple of wins (both very small) over the years I had had my bonds; even allowing for my smaller holding the return didn't compare at all.

[Dave2002]

It took about 15 minutes to file a self-assessment tax return yesterday.
I'd received the last interest statement I was waiting for (Santander), but had in fact added up the interest from monthly statements anyway so could have submitted earlier.
Yes, I keep a spreadsheet going through the year, but in my case it has details only of savings account interest and gift aid payments.

The only numbers I had to enter were:
Occupational pension (from the P60)
Taxed savings interest (the Halifax Reward scheme counts here)
Untaxed savings interest
Gift aid donations

State pension amount already filled in; it was slightly higher than what had appeared on my original notice of tax coding for 2024–2025, but I left it unchanged.
Hardly onerous, and you can quit and save whenever you like before submitting.
No ISA details required, of course.

And yes, I'm getting about 4% on my £50k of Premium Bonds.

Maybe I'll revisit that idea [making a declaration after writing to HMRC] later on - but in the first instance I think I'll try to get the near £50k PBs.

Then sort out whether I need to contact HMRC or hire an accountant

Mrs D is getting about 4% on her PBs.

I have limited faith in financial advisers. When I finally retired I received a letter from HMRC saying that I did not have to submit an annual tax return, unless some significant major change occurred.
I have no particular desire to reestablish an interaction with HMRC, and it's only in the last year or so that I have even thought about that, with the staff in banks offering "free" advice - "with that amount in you could be earning significant interest",
which got me thinking about the tax liabilities. When I mention that I'm not interested, and Stocks and Shares ISAS may do far better they seem put out and surprised.

When the interest rates were truly derisory, the chances of getting untaxed income above the personal liability threshold were remote.

[Serial_Apologist]

One the subsidiary subject of tax returns, why oh why do banks now only send out P60 end-of-year interest statements for up to June of the previous year? I assume this to be general. I visited my nearest branch (Lloyds) this time last year and asked for the P60 to take me up to April, and was merely handed a copy of the one and only one to June 2023 I had already uploaded online, and the counter employee could not give me an explanation, merely saying "This is what we issue". It wasn't in 2019. Last year my accountant who sorts out my returns evidently woke up to the fact that I had been sending her these new bank "end of year" (not) statements since 2020, assuming this to suffice for her purposes, and I had to send her photocopies of all my bank statements for the previous 3 years - as I used to do until she said there was no necessity for this. Can anyone think of a possible explanation?

[gradus]

Donkeys years ago I belonged to a Premium Bond buying scheme at work for I think a shilling a week and I still have the original but I've never won a bean with it.

[Pulcinella]

One the subsidiary subject of tax returns, why oh why do banks now only send out P60 end-of-year interest statements for up to June of the previous year? I assume this to be general. I visited my nearest branch (Lloyds) this time last year and asked for the P60 to take me up to April, and was merely handed a copy of the one and only one to June 2023 I had already uploaded online, and the counter employee could not give me an explanation, merely saying "This is what we issue". It wasn't in 2019. Last year my accountant who sorts out my returns evidently woke up to the fact that I had been sending her these new bank "end of year" (not) statements since 2020, assuming this to suffice for her purposes, and I had to send her photocopies of all my bank statements for the previous 3 years - as I used to do until she said there was no necessity for this. Can anyone think of a possible explanation?

None of the banks I deal with does this.
But if interest is paid annually rather than monthly, that statement might well be all you need, if it covers the only interest payment in the tax year of concern.

[oddoneout]

One the subsidiary subject of tax returns, why oh why do banks now only send out P60 end-of-year interest statements for up to June of the previous year? I assume this to be general. I visited my nearest branch (Lloyds) this time last year and asked for the P60 to take me up to April, and was merely handed a copy of the one and only one to June 2023 I had already uploaded online, and the counter employee could not give me an explanation, merely saying "This is what we issue". It wasn't in 2019. Last year my accountant who sorts out my returns evidently woke up to the fact that I had been sending her these new bank "end of year" (not) statements since 2020, assuming this to suffice for her purposes, and I had to send her photocopies of all my bank statements for the previous 3 years - as I used to do until she said there was no necessity for this. Can anyone think of a possible explanation?

Because it suits them, so the customer just has to lump it?
I had a savings account with Lloyds, but decades ago so can't remember what happened on that front, but accounts I have with building societies seem to tally up the interest on the anniversary of the opening of the account - inevitable in the case of fixed term saving schemes anyway.