Martin Lewis issues Premium Bonds warning over 'who should avoid' NS&I

Martin Lewis has issued a warning over the NS&I customers who should avoid Premium Bonds. The ITV regular spoke out on his latest Money Saving Expert podcast, which is released weekly via BBC Sounds, Spotify and other platforms to boot.

“Premium bonds are a form of saving operated by NSNI that used to be known as national savings, which is the government-owned financial institution, which means it's as safe as it gets because all other savings accounts are backed up to £85,000 effectively by the government backing them up. This one is totally backed up. Every penny you've got in there is backed up by the government," Mr Lewis said.

"The only way you could be in a problem is if the government went bust when we'd all have bigger problems. So that's NSNI. Premium bonds, being around a long time, are a form of saving where the capital that you put in is safe. In other words, you're always at worst going to get your money back. But the interest that you get is determined by a prize draw.

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"Each individual bond goes into a prize draw and has a chance of winning an amount of money, from 25 quid up to a million pounds.” He commented: "And that's what dictates the interest that you get. So your interest is a gamble, but your money is totally safe. Nothing like the lottery where you won't get any money back if you don't win. This way, every penny you put in is totally safe. It's in an incredibly popular form of savings.

"Now, there are many myths out there about premium bonds. I often get asked, I've had my premium bonds a long time but haven't won anything, will I be better off buying new bonds because they seem to win more? Complete urban myth. Every bond has the same chance of winning in the prize draw as every other bond.

"The reason more new bonds win is because there are more new bonds. When people were buying these bonds in the 1960s and 1970s, they were buying £1, £10, £20 worth. Now people are buying £500, £1,000, £10,000 worth.” He said: “So there are just simply more new bonds, so more new bonds win more often. And there is also, similarly, there are urban myths about people in different areas winning more. That tends to just be a function as people in those areas have more premium bonds.”