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Author Topic: Don't buy your grand-children premium bonds.  (Read 1829 times)

mrlownotes

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Don't buy your grand-children premium bonds.
« on: October 16, 2016, 09:53:29 AM »

Back in 1955 my grand-parents spent 5 on their grand-child.....me.
They bought 5 Premium Bonds.
I've referenced an inflation rate checker and it reckoned 1 in 1955 would be the equivalent of nearly 25 in 2016. By my maths they spent nearly 125 on their grandson.
So far, over the last 61 years, the bonds haven't won a single penny.
If the bonds were cashed in they are still only worth 5.
I know that this month could be the lucky one so I'll hang on to them.
I wonder if my grand-parents would have made such an investment had they known ?
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Jerry C

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Re: Don't buy your grand-children premium bonds.
« Reply #1 on: October 16, 2016, 10:19:38 AM »

Are they still alive? The bonds die with them. Children couldn't buy them when they came out. Mines an AW number in my mums name. Never won a penny, worth nowt. We keep mum alive just in case (ditto kidneys). Every time she bought something expensive like a motor home I'd check the numbers.
But no, zilch. Biggest fiddle out there but it got the country out of trouble after ww2.
Jerry.

BFSMP

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Re: Don't buy your grand-children premium bonds.
« Reply #2 on: October 16, 2016, 10:19:57 AM »


I suppose it depends on how much you invest.


I have a friend, who on reaching the age of 18 last March inherited a sum of 6000.00p from her grandma.


She invested it all in premium bonds because his savings account was offering just 1.5%. and to date she has won 225.00p in dribs and drabs. which is far more than she would have done in her savings account.


There are pros and cons, but at least her investment will never be less than what she has in place.


Jim.
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Colin Bishop

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Re: Don't buy your grand-children premium bonds.
« Reply #3 on: October 16, 2016, 10:57:30 AM »

Bonds don't die with the holder, they accrue to the estate of the deceased along with any prizes won during the administration period. They are then distributed in accordance with the terms of the deceased's will or other method of distribution of the estate.

Colin
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Bob K

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Re: Don't buy your grand-children premium bonds.
« Reply #4 on: October 16, 2016, 11:37:11 AM »

Around 50 years ago we bought a few Premium Bonds.  Not won anything so far, but unlike other forms of "gambling" you do not lose your stake, just the minimal amount of interest it would have accrued in a saving account.  I have never bought a single lottery ticket, and have saved hundreds of Pounds in the process.

The real value of a Premium Bond is that every so often we can think of what we'd do when they come up.
Value = incalculable.
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Colin Bishop

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Re: Don't buy your grand-children premium bonds.
« Reply #5 on: October 16, 2016, 11:41:02 AM »

You do lose money because the value doesn't increase with inflation.

Colin
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derekwarner

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Re: Don't buy your grand-children premium bonds.
« Reply #6 on: October 16, 2016, 12:41:54 PM »

Economics can't be that difficult

If you purchased  a 5 Government Bond......the value of the Bond is it's face value.......inflation is not a part of the equation as the Bond still has the same 5 face value after 10 years

This would suggest that [foregone] interest or capital gain is the only element that is not part of the deal.................

The Americans and the American economy are still big dealers in Government Bonds  O0...

The Government of Japan is currently offering Bonds with a negative 0.5% interest rate to invest  %%

Makes the old Arnott's steel biscuit tin buried in the backyard with all of the spare cash notes a good option. :-X.....just don't buy a dog  :o

Derek

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chas

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Re: Don't buy your grand-children premium bonds.
« Reply #7 on: October 16, 2016, 03:01:19 PM »

All down to luck. We bought our God son 100s worth. He had a Win of a thousand when he was 2 years old. Que Serra.

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Jerry C

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Re: Don't buy your grand-children premium bonds.
« Reply #8 on: October 16, 2016, 04:00:02 PM »

Colin, I have one 1 premium bond. It's in my mothers name. It quite clearly says on it non transferable. It costs her 25p to cash it in so it's actually only worth 75p.
Jerry.

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Re: Don't buy your grand-children premium bonds.
« Reply #9 on: October 16, 2016, 04:04:30 PM »


I think you'll find that the rules concerning the ownership of premium bonds has changed over the years and upon the person whom they are meant for becomes 18, they are transferable into their own name.


Jim.
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Colin Bishop

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Re: Don't buy your grand-children premium bonds.
« Reply #10 on: October 16, 2016, 05:15:19 PM »

Jerry, I'm not sure what you are suggesting. As you say, she could cash it in at a cost but if she were to die still owning it then the cash in value would pass to her estate. When my Mother in Law died I was her executor. She held 1,000 in premium bonds and the full amount was paid to me as her representative.

Colin
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Jerry C

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Re: Don't buy your grand-children premium bonds.
« Reply #11 on: October 16, 2016, 07:39:49 PM »

Hi Colin, to clarify, mum bought me this bond when they first came out. She could only have her name on it, not mine. A whole pound bought a hell of a lot of kielcraft kits. To me it was a fortune. I've held it for yonks. When she dies the cost of executing the will and transferring The pound to me would cost more than it's worth. To me it's a 1 that was thrown away in the 50's. 6000 is a different kettle of fish.
Jerry.

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Re: Don't buy your grand-children premium bonds.
« Reply #12 on: October 16, 2016, 09:41:28 PM »

When my Mum died, it was simple to get the money back from NSI in respect of the bonds she held. One form (free), a scan of the Death Certificate (free) and a stamp. (Come to think of it, the envelope that came with the form may well have been post paid - it was a few years ago). It took less than a week for the cheque to arrive.


I'd have no hesitation in buying my grandchildren some bonds. If I opened an investment account for them, there would be a pittance of interest. With the bonds it would only take one small win to get a better return.
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howyson

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Re: Don't buy your grand-children premium bonds.
« Reply #13 on: October 18, 2016, 08:44:57 AM »

I have poa for my sister and up until the bank rate drop it was more or less guaranteed that she would receive at least one 25 win a month, regularly two and very occasionally 3. however since then 'nada'! Obviously the prize fund has been seriously reduced.


Howard
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