R
obert Walker has held Premium Bonds ever since he was a child and was often given more on birthdays and at Christmas. But now, at the age of 80, he is moving his money elsewhere after years of disappointing returns.
Like millions of savers, Walker, who lives in Leigh-on-Sea, Essex, had bought Premium Bonds in the hope that he would one day hit the jackpot. The bonds, run by the Treasury-backed bank National Savings and Investments (NS&I), are the nation’s favourite savings product — with 24 million savers holding a total of more than £130 billion.
Rather than earning a guaranteed interest rate, the bonds are entered into a prize draw every month that gives savers the chance to win between £25 and £1 million. NS&I awards its tax-free prizes at an “effective prize rate” of 3.6 per cent and there are two £1 million jackpots each month — but many people win nothing at all.
The chancellor is planning a shake-up of the savings market in an effort to push more savers to invest in the stock market where better returns can be made in the long-run, and where your money can help to boost the economy. But it could be hard to persuade savers away from the security of cash – or the lure of NS&I, where all deposits are 100 per cent guaranteed by the government.
