Ever wondered how Premium Bonds work ? Here’s a great
article that explain the ins and out. I suppose the main take-away is
With average luck, your Premium Bonds should pay you prizes equivalent
to 3.25 per cent. Because the prizes are tax-free, this is equivalent to 5.42 per
cent for a higher-rate taxpayer and 4.06 per cent for a basic rate taxpayer.
The rest of the article talks about how it’s really a giant lottery, but the appeal
of Premium Bonds is that there’s a chance that you can win an inordinate sum of money
if your number comes up. Appealing to people’s greed has
always been a successful marketing ploy, as I’m sure those folks
down in Nigeria would tell you. If you want to learn more; or buy some for that
matter, head down to the National Savings and Investments website.
I’ve got a couple of Bonds stashed away, so who knows; one day I could be buying everyone
I know a round
of drinks … or maybe not 🙂