National Savings products

Produced by Tolley

The following Personal Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • National Savings products
  • Giving investment advice
  • Premium Bonds
  • Income Bonds
  • Other products
  • Closed products
  • National Savings Certificates
  • Children’s Bonds
  • 65+ Guaranteed Growth Bonds
  • Investment Guaranteed Growth Bonds
  • More...

National Savings products

National Savings and Investments (NS&I) is both a government department and an Executive Agency of the Chancellor of the Exchequer. According to its website, NS&I is one of the largest savings organisations in the UK, with 25 million customers and approaching £150 billion invested. Perhaps best known for Premium Bonds, the organisation also offers a range of other savings and investments to suit different people’s needs, including Savings Certificates, Income Bonds and Children’s Bonds. All the products offer 100% security because NS&I is backed by HM Treasury.

Individuals can buy National Savings products online, but new investors will need to supply evidence of identity and address.

This guidance note gives an overview of NS&I products, but it is advisable to check the NS&I website as the products it offers are subject to change.

Giving investment advice

The usual health warning applies here: you cannot give investment advice unless you are authorised to do so by the Financial Conduct Authority. You can tell your client about tax efficient investments but you must not recommend any based on his circumstances.

See the Regulated investment advice guidance note.

Premium Bonds

Premium Bonds do not guarantee a rate of return because a Premium Bond is effectively a raffle ticket. There is a draw every month, and only if your number is drawn do you win a prize.

Premium Bonds are attractive because there is a possibility (however remote) that an investor could win a £1m prize at any time. This prize is tax-free. Premium Bonds can be cashed in at any time and the money returned.

The minimum purchase is £100 and the maximum holding per individual is £50,000. There is no minimum holding period.

Premium Bonds can be bought by individuals who are 16 years old or older. However, they can be purchased by parents or legal guardians on behalf of children and, indeed, Premium Bonds are sometimes given as presents to children by their grandparents or great-grandparents (in which case the purchaser also needs

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