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If I was to buy £50k of PB for my child/grandchild (hypothetical) where would any winnings go?
Buying Premium Bonds for children/grandchildren
- Thread starter Ihavenojob
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It's not an investment, it's a gift.
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Premium Bond winnings are tax-free, whuch is useful if you are a taxpayer, especially at higher rate.
Children get the Personal Tax Allowance of £12,570 so are unlikely to pay any tax. So a tax-free vehicle has no particular benefit.
www.gov.uk
Since children are likely to have a long period before needing the money, for example for the deposit on a home, a savings vehicle whose return is less than inflation may not be a profitable choice
Children get the Personal Tax Allowance of £12,570 so are unlikely to pay any tax. So a tax-free vehicle has no particular benefit.
Interest on savings for children
How children's savings accounts are taxed, and the £100 limit on savings given by parents
Since children are likely to have a long period before needing the money, for example for the deposit on a home, a savings vehicle whose return is less than inflation may not be a profitable choice
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I get that PB's may not keep up with inflation, nor will savings. My query is, if I pay for the PB's from my bank account for a child, and those PB's win, if the amount held is the maximum so winnings can't be used for new purchases, where does it go, back to my account? Just had a thought, they may send a warrant (cheque) in the name of the holder, that's if they still send them
Looking after a child's savings
Visit the NS&I website and discover how you can open and manage a savings account for your child with us.
www.nsandi.com
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I first read that as the metal Pb = lead.
Go for Li , it'll be a few times bigger by the time she grows up!
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Hypothetically, anyone daft enuff to buy £50k of premium bonds as a gift, would not have access to £50k.
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How would they buy them?
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can you lose money on them?
Yes.
Can you make money on them?
Yes
Can you lose more on anything else you care to name?
Yes
Will anything else you care to name reliably outperform trackers over 50 years?
No.
Will anything else you care to name reliably outperform trackers over 10 years?
No.
Will anything else you care to name reliably outperform trackers over 5 years?
No.
Will anything else you care to name reliably outperform trackers over 1 year?
No.
Will you definitely, reliably, certainly lose value on Premium Bonds due to inflation over 1 year, 5 years, 10 years, 50 years?
Yes, yes, yes and yes.
FFS don’t mention PB's to JohnD. Despite holding them himself, all he does is slag them off and compare them with other investments. They’re not an investment, just a bit of easy access fun money with a small chance of winning a million quid and a reasonable chance of getting something each month with a £50k holding.
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Can you live in hope with a tracker? Hardly
With a PB? Oh yes, you can.
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