Martin Lewis issues savings advice on ITV's This Morning

The money saving expert admitted he was "not the biggest fan" of the savings product during an appearance on ITV.

A woman named Charlotte phoned This Morning to ask Martin where she should save money for her young child.

Specifically, she asked if she put money into a savings account or invest in Premium Bonds.

Premium Bonds are an investment product issued by National Savings and Investment (NS&I). Unlike other investments, where you earn interest or a regular dividend income, you are entered into a monthly prize draw where you can win between £25 and £1 million tax free.

Martin Lewis was giving advice during an appearance on This Morning. Picture: ITV

Martin replied: "Look, I'm not the biggest fan of Premium Bonds [and] certainly not for children's savings, because children have access to some of the best savings accounts on the market.

"So if you're going to save for them regularly, both Halifax and Barclaycard offer 3.5 per cent interest on up to £100 each month.

"If you're not saving regularly on lump sums, depending how much HSBC and TSB offered 2.5 per cent interest, or you could lock money away until she was 18 in a junior ISA with Dudley building society 2.5 per cent interest."

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Martin went on to compare the returns to what's available through premium bonds: "Now the Premium Bonds Prize rate is one percent, so it's a lot lower, even based on the prize rate.

"But the truth is most people win less than the published prize rate, and you're only going to get close to winning the published price rate with typical luck if you've got nearly £50,000 in.

"So, while putting money in Premium Bonds does give you the incredibly rare chance of winning the million pounds, based on typical luck, you would be far better putting it in one of those normal savings accounts that I just mentioned."

Premium Bonds give you the incredibly rare chance of winning £1million

Savers are likely to continue to struggle over the coming months after the Bank of England elected to keep the base rate at 0.1 per cent.

Rachel Winter, an Associate Investment Director at Killik & Co, broke down what this will mean for savers, borrowers, and even the Government: "The success of our Covid-19 vaccination programme combined with the reopening of our economy has led to a surge in consumer activity, which in turn has caused a spike in inflation to 2.1 percent.

"However, the Bank of England has not yet felt the need to apply the brakes to prevent the economy from overheating, and today it has left interest rates untouched.

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"Borrowers will be relieved, including the UK government which borrowed a further £24 billion in May.

"On the other hand, savers will no doubt be disappointed about continuing low returns on cash, as will retail banks who must continue to charge lower rates for loans and mortgages.

“Given that the government is reducing furlough scheme contributions next month and real wages have fallen, it is expected that inflation will stabilise over the coming months without the need for interest rates rises in the short-term.”