What happens to premium bonds when you die, can they be transferred after death?

The executor will need to fill in a claims form and submit a registrar’s copy of the death certificate. NS&I will not accept a photocopy. The account holder’s will must also be included with the form, or a photocopy certified by a solicitor. The 12-month holding period starts from the date of death on the death certificate.

Once you submit the claim, NS&I will contact you in 11 days. While the prizes are tax-free, Premium Bonds are subject to inheritance tax and need to be declared as part of the estate for probate.

After the 12 months are over, the investment should be cashed as soon as possible.

As you and your husband hold the maximum £50,000 of Premium Bonds, you will not be able to buy more. Therefore, you may want to consider other options for the lump sum.

Should I stick with Premium Bonds?

Bondholders saw their odds of winning slashed in December to 34,500 to 1, from 24,500 to 1. The prize fund also shrank, leaving bondholders with the longest odds and poorest returns in more than a decade.

The lengthening odds put the “prize rate” on Premium Bonds – the equivalent to an interest rate – at 1pc, still more than double the rate on leading easy-access accounts. In reality, however, those with smaller holdings are unlikely to win anything.

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