Is it time to dump your Premium Bonds?
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This is Money Podcast
This episode is titled:
Is it time to dump your Premium Bonds?
Notable Quotes
"The chance of holding money there for years and never getting anything, I personally just don't get it."
"Even a delay of five years in your 20s can create a £40,000 hole in your retirement savings."
"It's important to have that paper trail if something goes wrong with the building work."
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Get More InsightsEpisode Summary
In this episode of This is Money, hosts Georgie Frost, Helen Crane, and Tanya Jeffries cover several pressing financial topics, beginning with the evidence that the prize fund rate for Premium Bonds has been slashed once again, sparking questions about the product's popularity and utility. Often regarded as a safe and fun savings option, Premium Bonds now face criticism as many holders have never won a prize, and the odds of winning are becoming less favorable as prize funds are reduced. The conversation reveals insights into personal preferences regarding savings, with some guests favoring traditional interest-bearing accounts over the lottery-like aspect of Premium Bonds.
The hosts also examine the state of local bank branches as customer service declines, illustrated by a case where a customer was refused cash at a bank counter and instructed to use an ATM instead. The implications of cash transactions are further explored, especially as one reader questions the legality and risk involved in paying builders in cash, raising concerns about potential tax evasion. Tanya and Helen emphasize the need for proper receipts to maintain a clear record of transactions in case issues arise from work done by builders.
Another key topic covered is the significance of pensions, particularly for young adults. New research shows that delaying pension contributions by just five years can lead to a £40,000 deficit by retirement due to the effects of compound growth. The hosts share their personal experiences with pensions and encourage young listeners to start saving early, dispelling the mentality that small contributions are inconsequential.
Lastly, the discussion touches upon attitudes towards inheritance, with survey results indicating that people may have more faith in their heirs managing money responsibly than previously thought. This leads to debates on responsible spending versus saving when receiving an inheritance, highlighting the balance individuals seek between enjoyment and financial prudence.
The hosts also examine the state of local bank branches as customer service declines, illustrated by a case where a customer was refused cash at a bank counter and instructed to use an ATM instead. The implications of cash transactions are further explored, especially as one reader questions the legality and risk involved in paying builders in cash, raising concerns about potential tax evasion. Tanya and Helen emphasize the need for proper receipts to maintain a clear record of transactions in case issues arise from work done by builders.
Another key topic covered is the significance of pensions, particularly for young adults. New research shows that delaying pension contributions by just five years can lead to a £40,000 deficit by retirement due to the effects of compound growth. The hosts share their personal experiences with pensions and encourage young listeners to start saving early, dispelling the mentality that small contributions are inconsequential.
Lastly, the discussion touches upon attitudes towards inheritance, with survey results indicating that people may have more faith in their heirs managing money responsibly than previously thought. This leads to debates on responsible spending versus saving when receiving an inheritance, highlighting the balance individuals seek between enjoyment and financial prudence.
Key Takeaways
- Premium Bonds' prize fund rates have been cut, leading to decreased interest from potential investors.
- Local banks are becoming less accessible, with some customers required to use ATMs instead of accessing cash at counters.
- Delaying pension contributions can lead to significant deficits in retirement savings, emphasizing the importance of starting early.
- When paying contractors in cash, ensure proper documentation to avoid potential issues with tax evasion.
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