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Premium bonds are 'a gamble not an investment'

03 November 2006
Despite the potential to encourage people who otherwise would not be committing any of their earnings to their savings pool, financial advice site Moneyfacts has warned that Premium Bonds are more of a risk than people are led to believe.

Lisa Taylor, a spokesperson for Moneyfacts, said that although she believed the popularity of premium bonds would grow given the increased publicity surrounding them, there were better options on the market for ensuring a decent payback on investments.

"The returns on [premium bonds] are much lower than say, for example, an instant access savings account and the press coverage they get is terribly distorted by the big winners," Ms Taylor said.

"Of course, if you save with National Savings and Investments (NS&I) you could win nothing and your savings [could] depreciate over time with inflation. They are probably more of a gamble than an investment."

NS&I this week celebrated the golden anniversary of their unique savings bonds, which began in 1956.

To read more about investment bonds, click here.

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