Premium bonds v ISA?

[vickster]

Presumably you mean Trump...yes he's a loon

 

[SpokeyDokey]

We retired 12 months ago. In the years leading up to this we saved like fury, basically one full time salary every month, on top of pensions etc. We currently have £100,000 in PBS and have had for a while - all the savings went there. We consistently beat an ISA winning an average of £150/month.
I know it’s luck. I also enjoy the anticipation each month of the big one. Sad I know.

If you are considering retirement there is a lot to consider and I would think about pensions as well. You’re FA will help. We did not add to the pension fund as five or six years before retirement I knew I had a large enough pot. I had an opportunity to “protect”the pot and receive a guaranteed 4.5% pa. It meant I couldn’t easily add to my pot though.

One place I’ve put money from my lump sum is Prufund. I’m happy with it.

Living off savings till pensions kick in is OK. We do it and have several friends who do. A good FA will provide an illustration/projection on this up to whatever age you wish - I plumped for 95!! We combine taking maximum income below the tax free amount with spending savings if necessary - it usually isn’t.

BTW - retirement living costs are not as high as working. This really surprised me, working is expensive.

How does 1.8% beat ISA rates?

Our batch of ISA's has an average of 2.21% - mainly 5 year and some 3 year lock ins. These are the last 7 ISA's that we have opened in the last 5 months. Two are new and the rest are transfers.

2.00%
1.75%
2.50%
2.20%
2.15%
2.20%
2.15%

We also have a few NS&I bonds running at decent* rates that we recently opened:

Oct 17 2.2%
Jan 18 2.2%
Jan 18 2.15%

Edit: *in the current (FSCS protected) market.

 

[PaulSB]

@SpokeyDokey in my view this isn’t comparing like with like. Premium Bonds allow instant access whereas as the examples you give are 3 and 5 year lock ins. I believe, but could well be wrong, cash instant access ISAs are around 1.25 to 1.5%. Our PB money is that which we want with instant access without penalty.

The money I want to tie up for 3-5 years is elsewhere, not an ISA.

Plus I enjoy having the possibility of a major win. Which may seem foolish but I feel money should be for pleasure. It took long enough to earn it so might as well enjoy it!!

 

[SpokeyDokey]

@SpokeyDokey in my view this isn’t comparing like with like. Premium Bonds allow instant access whereas as the examples you give are 3 and 5 year lock ins. I believe, but could well be wrong, cash instant access ISAs are around 1.25 to 1.5%. Our PB money is that which we want with instant access without penalty.

The money I want to tie up for 3-5 years is elsewhere, not an ISA.

Plus I enjoy having the possibility of a major win. Which may seem foolish but I feel money should be for pleasure. It took long enough to earn it so might as well enjoy it!!

Fair point re the instant access. Our quick grab money is in Santander 123 a/c's which gives a reasonable return - at least by today's paltry standards.

Our best earning investments are in stocks & shares ISA's which have returned in the 4-9% range over the last few years. I did try self select some while back but I'm useless at it so I just use managed funds where I select broad investment areas and risk level and let the experts crack on.

Best result I ever had was putting £sizeable into a Friends Life fund (now Aviva) in 2003 and when I cashed it in the year before last it had grown by 3.6 times. I wish I'd put everything we had into that one! Probably would've crashed then!

Good luck with your PB's and I hope you get a monster win one day. My mum bought me 2 x £1 PB's in 1956 when I was born and I've had a £30 in 1965 (quite a lot then) and a £25 the year before last. Only found out about the latter when I did that check online thing!

 

[PaulSB]

@SpokeyDokey Thanks for the good wishes. We have stocks and shares but in a managed fund as I've never felt sufficiently confident to do this myself. We achieve 4-5%, as I'm risk adverse I'm happy with this. We have Santander as well but only use it as a current account since the interest rate was halved, you can get 3% with Tesco.

Best advice I ever got from my FA was to secure my pension pot a number of years before retiring. It proved to be very sage advice.

I remember years ago reading ASDA shares were 23p. That was ridiculous so I bought 2000, sometime later Walmart came along!!!

 

[SpokeyDokey]

@SpokeyDokey Thanks for the good wishes. We have stocks and shares but in a managed fund as I've never felt sufficiently confident to do this myself. We achieve 4-5%, as I'm risk adverse I'm happy with this. We have Santander as well but only use it as a current account since the interest rate was halved, you can get 3% with Tesco.

Best advice I ever got from my FA was to secure my pension pot a number of years before retiring. It proved to be very sage advice.

I remember years ago reading ASDA shares were 23p. That was ridiculous so I bought 2000, sometime later Walmart came along!!!

Agree with the pension pot advice. I retired at 48 but couldn't take my pension until I was 53 (obviously that's now 55) but I'm glad I paid in my AVC's and was fortunate that at its core it was a fully funded scheme.

Apart from that we were high earners through the 90's/early noughties so, like you, we saved and invested for our old age - dumped the mortgage first though.

I'm very risk adverse in most walks of life which has become more pronounced as the years have scrolled on by and even now I fret over our stocks & shares ISA's - and I just haven't got the nerve to get involved in P2P lending.

Might have a look at Tesco - thanks. I was a bit miffed when Santander chopped the rates. We had three a/c's with them (two personal and one joint) so it was a handy little earner for a while. As in all walks of life nothing lasts forever!

Nice result re ASDA shares!

 

[ColinJ]

Ooh, I just won (nearly) half a set of chainrings on the PBs!

(I ordered some chainrings for £51 and then discovered that I won £25 in the April draw.)

I remember years ago reading ASDA shares were 23p. That was ridiculous so I bought 2000, sometime later Walmart came along!!!

Did each ASDA share become one Walmart share? If so - blimey, well done - they are trading at over $80 today!

 

[PK99]

Ooh, I just won (nearly) half a set of chainrings on the PBs!

(I ordered some chainrings for £51 and then discovered that I won £25 in the April draw.)


Did each ASDA share become one Walmart share? If so - blimey, well done - they are trading at over $80 today!

take over was for cash @220p per share in1999

 

[ColinJ]

take over was for cash @220p per share in1999

Still, a VERY nice return!

 

[PaulSB]

take over was for cash @220p per share in1999

Correct.

 

[SpokeyDokey]

We now have a decent chunk of money invested in Premium Bonds - driven to this due to *iss poor rates on FRB's and ISA's.

Saying that we have today opened another FRB with Vanquis Bank at 1% for 3 years as I couldn't stand the thought of putting too much money into the ifs/buts/maybes rate of Premium Bonds.

Back to Premium Bonds...

...our first dip into the electronic luck dip pot is next month.

Getting very excited...

 

[vickster]

Clearly not risk free but my Shares Isa opened in April/May is up around 10.3% currently (mix of low and medium risk)

 

[SpokeyDokey]

Clearly not risk free but my Shares Isa opened in April/May is up around 10.3% currently (mix of low and medium risk)

Great result thus far!

Who did you go with in the end? I remember the discussions on here but can't remember the outcome.

We have just switched an Aviva investment fund that invested in property to a UK/Euro/emerging markets fund and are thinking of increasing our monthly payments into it. Hope it at least matches yours in terms of outcome!

 

[vickster]

Vanguard

 

[SpokeyDokey]

Vanguard

Thank you.

I was just going to edit my post by saying: 'oops, sorry I forgot my manners - if you don't mind me asking'.