Martin Lewis issues 'really poor' warning over NS&I Premium Bonds

Martin Lewis has issued a warning to Premium Bonds holder and said it's "really poor". The ITV The Martin Lewis Money Show star spoke out on the latest edition of his show, which aired from 8pm til 9pm on Tuesday (November 5).

Mr Lewis said: “The more you have in, the closer you get to 4.15 per cent. But you never reach it, for a simple reason. Because one person won £1m, a lot of people have to win nothing, and therefore it’s always going to be slightly less than the mean.

“So to answer this question, even at the top rate with typical luck you are likely to win substantially less than an easy access or a fixed account. But this is tax-free, so the first thing I’d do, is I’d put your money in a cash ISA.

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“And if you’ve filled up your cash ISA and you’re still above your Personal Savings Allowance, that’s when these come into play. You want to have, if you’re gonna do it, you want to be maxing out at £50,000 or as near as you can, and you want to be somebody who pays tax on savings interest, because otherwise, the returns aren’t that good.

“So for higher earners with lots of savings who are paying tax on interest, it’s a good bet. For those people just putting a small amount of money in who don’t pay tax on savings, it’s a really poor bet.” A social media user replied to Mr Lewis and said: "I was given some Premium Bonds when I was at school. In 60 years all I have won is £25, in 1970. I can't even be bothered to cash them in, their present day buying power is worth only a fraction of what it was when I got them."

"Do people still have 'premium bonds'? Or am I thinking of a very old thing that my Auntie used to get me in the '60's?" a second said. Another typed: "3 years ago l decided to put my monthly cat insurance premium into premium bonds.

"If a cat needs treatment, I'll withdraw the money. Meanwhile, cats are OK and I've won something each year. Definitely more than I'd get in interest."