With the economy in such a state these days, there is what the Times of London calls the flight to safety so where are Britons putting their cash? They are putting it in premium bonds. What are those, you say? Well, the National Lottery only started in the 1990's in the UK. So, how did Britons do one of the things they love to do, namely gamble? Well, you can gamble on the ponies (my mother did when she lived here) but you can also buy Premium Bonds. These bonds do not give a yield but they give you the chance in a monthly lottery based on your bond number. You can win between £50 and £1,000,000. Now, the current odds of winning is 1:22,000 so basically you get something like, according to the Times, 3.8 percent.
I find this one of the most bizarre ways of running a lottery. However, it has proved so popular that, according to the wikipedia article above, one-third of people in the UK own some (you have to have 100 after that you can buy them ten at a time). I was talking to my flatmate about it and he was telling me that Premium Bonds are given as gifts like at births and stuff. In any case, still very strange.
So, while I was looking into Premium Bonds to find out more about them, I discovered that the UK government actually runs a bank. Now, in the States you can buy Savings Bonds from the US Treasury at Treasury Direct but in the UK you can get a bunch of different banking options at National Savings and Investments. I had talked about the Savings Bonds scheme to a bunch of people here but no one knew what I was talking about. One of the pit falls of living here is that all the financial language is similar but completely different at the same time. So, now that my bank is one of the "walking dead", I am seriously considering moving some of my money to the National Savings and Investments (the good thing about it is that it is 100% backed by the government).
One last note before I let you go. If you want to read some about the credit crunch in the UK from someone over here, you can read UK Bubble Blog but I should warn you that sometimes it seems like the author is hyperventilating a bit (but like I can talk, given my earlier rantings about going to gold).
posted by Chris #4:48 PM | 0 comments |