No more premium bonds at the Post Office

25 June 2015

postoffice10aIf you like a (safe) gamble with your hard earned savings, you could do worse than investing in Premium Bonds. Your stake is totally safe, and you might win a million. Although you probably won’t. However, while Premium Bonds were traditionally available at the Post Office, from the end of next month you’ll have to move with the times and buy them directly from NS&I itself.

Today’s announcement comes as the current contract with the Post Office runs out on 31 July 2015. NS&I said they would not be renewing that contract as a result of “changing consumer demand and efforts to reduce costs.” But this is actually a bold move- currently around one in five sales of premium bonds take place in Post Office branches, but proportionately more money is invested through this channel. 2014/15 figures show that 750,000 transactions were made in Post Office counters compared with 3.2m made directly with NS&I, but during the same period, a third of the sales value of Premium Bonds- £3.9bn worth were actually sold in post offices rather than direct.

Of course, the reason for this might be that pensioners favour the Post Office and pensioners tend to like Premium Bonds too. The National Federation of Subpostmasters were unimpressed with the news of the demise of the Post Office contract, saying: “This is very disappointing news, particularly for our elderly and more vulnerable customers who rely on face-to-face support from subpostmasters with handling these types of transactions.

NS&I’s chief executive, Jane Platt, said, insincerely: “As our relationship with the Post Office comes to an end on 31 July this year, I would like to thank them for the support and service they have given our customers over the years and wish them every success for the future."

She also said the  majority of customers already used direct channels to buy premium bonds, making the move “a natural next step for NS&I.” She described the direct sales process as “ intuitive and straightforward”, thereby proving she has never actually bought premium bonds on the NS&I website herself.

But is the loss of premium bonds from your local post office a big deal? The total percentage payouts on bonds were cut in 2013 to stop them becoming “too attractive” as an investment and although an extra £1million prize was added a year ago, bringing the total to two, as we told you then, this meant that the overall chances of winning any prize other than £1million actually went down slightly.

Premium bonds, however, remain a popular investment, and you can now hold up to £40,000 in premium bonds, and many do- after all, if you don’t win and get a nil return on your investment, you’re hardly down on the teeny interest rates you would have earned sticking it in a savings account, and you never know, this month, it could actually be you. Optimistic lot aren’t you?

TOPICS:   Technology   Banking   High Street News

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