Savings if you have any - More on Premium bonds and tax

There is a minimum investment of £10 and a new bond does not go into the draw for three clear calendar months after purchase. So, for example, a bond bought at any time in January is entered in the May draw. You can cash a bond in at any time.

The bonds are selected by a machine called ERNIE. The numbers drawn are thoroughly checked for randomness by an independent auditor and there are no 'lucky' or unlucky numbers. You can arrange to go and see ERNIE and have its workings explained if you contact the Prize Draw Supervisor, Bonds and Stock Office, Blackpool FY6 9YP (tel: 089 6 6619 1).

If you like a gamble, then it is worth having some money in premium bonds, especially if you pay tax.

You can buy premium bonds at a post office and at banks. There is a special leaflet about them entitled Your Questions on ERNIE.

More information

Savings - Interest Paid Gross

National Savings offer one of the few safe investments which still pay interest 'gross'. Building societies, local authorities and banks all now pay interest as if you had already paid basic rate income tax on it. If you do not pay tax, it is advisable to have some money invested in National Savings where the interest is paid gross.
For example, a married man of sixty-six gets the age allowance of 9 ,069 . If his retirement pension is 69 0.9 and his company pension is £18.66, his annual income is 8068 That means that he can have 967 free of tax. So he could invest enough capital in National Savings which pay interest gross to give him 967 and put the rest in a building society or in . . . ... see: Savings - Interest Paid Gross