Published On: Sun, Aug 16th, 2020

Premium Bonds: NS&I explains rules on inheritance when someone passes away | Personal Finance | Finance

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Premium Bonds are a lottery system run by the National Savings and Investments company, otherwise known as NS&I. While a bond costs £1, the minimum investment a person can make is £25, and the limit on Premium Bonds is £50,000. The lottery bonds are paid into by the Government, and a monthly prize draw then provides selected bondholders with a payout. 

The more a person buys, the greater their chances of winning. 

The top prize for Premium Bonds stands at a staggering £1million, and each month, NS&I creates two lucky millionaires. 

For many people, Premium Bonds are a significant holding, and so they will be keen to understand what will be done with the bonds they own if they were to pass away.

Thankfully, NS&I has provided Britons with further guidance which is likely to shed more light on the situation.

READ MORE: NS&I: The top interest rates currently available to British savers

If this instance occurs, then NS&I is poised to take specific action to resolve the issue.

Winners of Premium Bond draws tend to receive a prize warrant to inform them of their winnings.

The relevant surviving person is then tasked with sending this warrant back to NS&I upon receipt and informing the savings company about the person’s death.

Any prizes won are then held by NS&I until the claim is completed.

NS&I has explained the annual prize rate fund for Premium Bonds is set at 1.4 percent.

However, no interest is earned as the interest rate funds the monthly prize draw.

All prizes NS&I pays out through the Premium Bonds system are tax-free – meaning they are exempt from UK Income Tax and Capital Gains Tax. 

Britons can choose to withdraw their bond holding at any time, with no notice and no penalty. 

The next prize draw is scheduled to occur in September, with many prizes set to be won and two new millionaires scheduled to be made. 

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