My issue with premium bonds is that they are an unnecessary tax perk for higher rate taxpayers, but make little sense for basic rate taxpayers who find the isa allowance sufficient for cash savings. They should come with a competitive prize rate but the prizes received should be treated as income. Secondly, the state should be encouraging people to invest, not to park large sums in long-term cash savings. Holding up to £50,000 (or £100,000 for a couple) in Premium Bonds is excessive in most circumstances—especially for higher-rate taxpayers, who typically have a greater capacity for risk and loss.
My issue with premium bonds is that they are an unnecessary tax perk for higher rate taxpayers, but make little sense for basic rate taxpayers who find the isa allowance sufficient for cash savings. They should come with a competitive prize rate but the prizes received should be treated as income. Secondly, the state should be encouraging people to invest, not to park large sums in long-term cash savings. Holding up to £50,000 (or £100,000 for a couple) in Premium Bonds is excessive in most circumstances—especially for higher-rate taxpayers, who typically have a greater capacity for risk and loss.
Is it really a good deal for the govt if they lose revenue from other forms of higher rate taxpayer saving? (Or their consumption)
I don't think it will lead to significant changes in HRT savings - that is what the historical record says
Maximum investment is 50k - I suspect you're right that such holders have maxed out their ISA allowances (over more than one year...)
Oops, typo, corrected, thank you