Martin Lewis discusses children's savings in Premium Bonds
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Premium Bonds are offered by NS&I and they allow savers to have the chance to win tax-free prizes every month. Premium Bonds can be purchased with as little as £25 and the bonds can be held for a number of years. Each month, Premium Bonds are entered into a monthly draw where holders can win a cash prize ranging between £25 and £1million and the next draw takes place on October 2, just over two weeks away.
With the next prize draw approaching, savers may want to take note of NS&I’s inheritance rules. NS&I details if a person needs to claim the savings of someone who has died, they can do this online without needing to create an online account.
The only information a person will need is details on the holder who has passed away, as well as evidence they’re legally entitled to claim their savings.
NS&I will let people know if a Grant of Representation (also known as a Grant of Probate or Grant of Letters of Administration) is needed once they have received the necessary paperwork. The organisation may ask for these grants if the customer’s total NS&I savings are £5,000 or over.
Specifically, people will need to have the following information to hand following the bereavement of a family member:
- The customer’s personal details (full name, address, date of birth, date and place of death)
- Spouse name (if applicable)
- Full name of the executor(s) if there is a Will, or administrators if there is no Will (if you’re obtaining a Grant of Administration or Confirmation of Executor Dative)
- Type of NS&I account(s) the customer held
- Details of the person who is making the claim
- Bank account details to pay the money into
When a Premium Bond holder dies, their bonds will become part of their estate. The bonds will continue to take part in prize draws for 12 months following the date of death, unless they are cashed in before that.
NS&I explained what happens with these Premium Bonds should the deceased win any prizes: “Once we’ve been told of the customer’s death, any prizes won will be paid by warrant (like a cheque) to the person entitled to the money after we’ve completed the claim.
“We’ll hold on to any prizes the customer wins before then and send them once the claim is completed. Then we’ll send any future prizes won by warrant after each prize draw to the person entitled to the money. We can’t pay these prizes electronically or consolidate them and pay them at the end of the 12 months.”
Where a customer has died but has won a Premium Bond prize and sent a warrant, NS&I details the following will be needed: “Please send the prize warrant back to us and we’ll reissue it to the person entitled to the money, once we’ve completed the claim. We’ll also hold on to any other prizes the customer wins until we have completed the claim. Then we’ll send any future prizes won by warrant (like a cheque) after each prize draw to the person entitled to the money.”
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Where a family member is unsure of what NS&I savings the deceased held, they can contact NS&I for help. NS&I can be called on 08085 007 007.
Additionally, the organisation can be reached through Twitter on @nsandihelp.
Should documents need to be sent to NS&I, they can be returned to the holder via recorded delivery. To do this, people will need to send the documents with a covering letter asking NS&I to return them.
Where original documents are sent, NS&I advises a secure service should be used. For bond certificates, originals can be sent but “photocopies are also fine.”
NS&I warns that at the moment, it is taking longer than usual to handle these kinds of enquiries. As such, bereaved family members may not get hold of the Premium Bonds they’re owed as quickly as they’d like but NS&I is “working hard to get back on track.”
Currently, Premium Bonds have 34,500 to one odds on winning, for every £1 bond held. While the odds of winning are small, a one percent interest rate is added onto the prize fund every year.
All prizes are tax free and the minimum needed to pay in is £25, with a maximum limit of £50,000 applicable.
Premium Bonds can be bought online using NS&I’s “secure online system”. Additionally, Premium Bonds can be bought over the phone, through the post, by bank transfers or standing orders.
Any held Premium Bonds can also be cashed in at any time. To do this, holders will need to log in to the organisation’s online service or call NS&I directly.
To cash in Premium Bonds, savers will need their holder number and bank account details to hand. Additionally, if they’d like to cash in any specific bonds, they will need to have their bond record at the ready.
NS&I also offers a range of savings products which can be inherited. This includes ISA allowances.
People can inherit additional ISA allowances if their spouse or civil partner dies, up to the value of their ISA at the date of death. If a person’s spouse or civil partner dies on or after December 3, 2014, they’ll be entitled to this new allowance.
Currently, NS&I has two ISAs available for customers. A Direct ISA which pays 0.1 percent and a Junior ISA which has an interest rate of 1.5 percent.
Savers will also be able to put their money into Income Bonds (0.01 percent), Direct Saver accounts (0.15 percent) and Investment Accounts (0.01 percent).
Full details on Premium Bonds and other NS&I products can be found on the organisation’s website. On top of this, impartial guidance on savings in general can be sought from the likes of Citizens Advice and Money Helper.
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