Every Tuesday we get an expert to answer your financial problems or consumer disputes. WhatsApp us here or email moneyblog@sky.uk. Today, we are tackling this issue sent to us by Brodie.
“My late husband had premium bonds. Can I put them in my name? They are over 60 years old. How do we know if the numbers came up as we never checked them?”
We got consumer expert Scott Dixon, AKA The Complaints Resolver, to take on this one.
“First of all, I’m very sorry to hear of your loss. I’ll begin to answer your question by explaining what and how premium bonds work and go through your options,” he says
Basically, premium bonds are a risk-free savings product provided by National Savings and Investments (NS&I) and backed by the government.
The money put into premium bonds is guaranteed to be held safely and can be accessed at any time.
You can invest a minimum of £25 in bonds, with each one worth £1. These bonds, which each have a unique number, are then entered into a prize draw each month, with prizes ranging from £25 to £1m tax-free.
It’s not guaranteed that you will win a prize in the monthly draw.
Dixon says the first thing you need to do is find out the value of the bonds owned by your late husband.
“If it’s more than £5,000, a Grant of Probate or Grant of Letters of Administration will be required to put them in your name,” he says.
“Premium bonds can be transferred to someone else while the holder is alive to someone who is over the age of 16 and lives in the UK or a registered UK charity,” he adds.
“When a premium bond holder passes away, they become part of the deceased’s estate and cannot be transferred to anyone else.”
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Following your husband’s death, his premium bonds will remain eligible for prize draws and wins for up to 12 months.
After that, the bonds won’t be entered into the prize draw but will be held in the Unclaimed Premium Bonds Account.
Any prizes that have been won prior to that can be claimed afterwards with no time limit by the executor(s) or beneficiaries of the estate.
You can check to see if any prizes have been won here.
“The executor(s) of the estate can either redeem them during the probate process, so the money can become part of the estate to be distributed to the beneficiaries, or leave them untouched for up to 12 months so they remain eligible for the prize draw,” Dixon says.
He explains that NS&I will need:
- Your late husband’s full name, address, date of birth, National Insurance number, date and place of death
- Your full name
- Full name of the executor(s) of the will or administrators if there is no will
- Premium Bond details
- Bank account details to pay the money to
NS&I have an online form for bereavement claims which you can complete to submit details here.
It also has a tracing service if you do not have the details, and can help you find the premium bonds.
If you need to correspond with NS&I via post, Dixon says you should send any important documents by recorded delivery with a cover letter.
Pic: iStock
It’s important to note that premium bonds and prize winnings are not exempt from inheritance tax, he adds.
When should you update premium bond information?
“Updating premium bond information when you move house or updating a will is something most people don’t think about. Think of it as you would do with a driving licence,” Dixon says.
“It’s worthwhile noting your premium bonds in your will or in a Letter of Wishes.
“You can either give instructions to your executor(s) in a will or signpost them with a Letter of Wishes to guide them.
“A Letter of Wishes is not legally binding, but it’s useful for Executor(s) as it can be updated when circumstances change.”
This feature is not intended as financial advice – the aim is to give an overview of the things you should think about. Submit your dilemma or consumer dispute via:
- WhatsApp us here
- Email moneyblog@sky.uk with the subject line “Money Problem”
