Premium Bonds: Are they worth it? Discussion Area

kenshaz · 25 October 2006 at 10:24AM

webwiz wrote:

I was about to write pretty much what whambamboo has already said so I will just endorse it.

Premium Bonds are very suitable for two categories of saver:

1) Higher rate tax payers who have used up their ISA allowance (hopefully with a maxi) and prefer to get the interest on their "rainy day" money in lumps in relatively exciting prizes rather than just a book-keeping entry at the end of each year
2) Anyone who wants a flutter with their virtual interest

The point that you are making is that they are suitable for the rich and gamblers

kenshaz · 25 October 2006 at 10:27AM

ariba10 wrote:

About twelve months ago a woman holding about nine pounds in bonds won the one million pound prize.

It will happen ,but like the Crime Watch warning,probably not.you I HAVE HEARD OF A PERSON WHO BOUGHT ONE LOTTERY TICKET FOR A POUND AND WON 2 MILLION.

kenshaz · 25 October 2006 at 10:33AM

The point of Martin's article is that in the true money savings tradition he is trying to save you money,the governments vaults are swelling because of the fact that they are promoting gambling.They also make money by taking revenue from the sale of a drug (alcohol).

faineant · 25 October 2006 at 10:58AM

Alan50 wrote:

... and as of the last 4 years (48 draws) all winners of the £1M. prize have had £20-£30K in Premium Bonds...
Good Luck
Alan

01 July 2004
1959 PREMIUM BOND WINS £1 MILLION JACKPOT.
A new record in the history of Premium Bonds has been set today as a Bond bought more than 45 years ago in February 1959 has won the £1 million jackpot for a mystery winner in the London Borough of Newham.

Not only is it the smallest value Bond ever to win the £1 million jackpot, it is also the oldest Bond to net the top prize, debunking the myth that old Premium Bonds never win prizes.

The lucky winner, whose identity is being kept a closely guarded secret, owns just £17 worth of Premium Bonds and the winning Bond was one of three purchased together in 1959.

don1982 · 25 October 2006 at 11:43AM

Have a look at the teletext site for PBs and see how much winners have on deposit - most winners of each prize value seem to have the 30k max holding

lavenderblue777 · 25 October 2006 at 11:52AM

I bought 30k worth of PB's last November and have won almost every month, total in so far this year i have won over 2k and there are 2 months of the year left to go. The excitement factor is great & if i had the money in a savings account i know i would only keep dipping into it until it was gone, so for me the PB's are great..... so far

cheggers · 25 October 2006 at 12:22PM

don1982 wrote:

Have a look at the teletext site for PBs and see how much winners have on deposit - most winners of each prize value seem to have the 30k max holding

It's the rich who always seem to get richer.

I wonder how many premiership footballers have £30K's worth of PBs.

tyn · 25 October 2006 at 12:30PM

Hi,

I understand PremiumBonds are inflation beating. Is this means, you will get back (on mature date) your capital+interest(3.xx%) +inflation(2.xx)?

I'm sure normal/ISA savings don't cover inflation.

Could anyone shed a light on this matter.

Cheers,
Tyn

toepazz · 25 October 2006 at 12:35PM

:j Bought £30k worth in August and they first entered the draw in October and won £250 - long may it continue :j

don9999 · 25 October 2006 at 12:54PM

Am I the only person that disagrees somewhat with Martin's article?
Or perhaps I'm disagreeing more with the government.

Premium Bonds are advertised as an 'investment'.
I totally agree with Martin's description that Premium Bond's are relatively poor investment, compares to other investment vehicles. (Though surely he didn't need to go into so much detail to prove the point - isn't it rather obvious...?)

But.......I simply don't understand why PBs 'are' considered to be an 'investment'. Surely they are just a gamble.
In reality they need to be compared with other gambles, like the lottery, or betting on horses, or going to the casino.

In 'that' comparison, they clearly come up very well, since you are only ever gambling with the lost interest. So for every £100 of PBS, you are gambling with just over £3 to win a prize of 'probably' £50, but possibility of up to £1M. You couldn't do this betting on a horse!

OK, there ARE disadvantages. You have to tie up the capital. So betting on horses, you don't have to put away £100, in order to place a £3 bet. But with PBs you do.

So......to me, it's pretty silly to talk about Premium Bonds as an 'investment', so I think it's also pretty silly to go into detail to prove why it IS such a poor investment. Perhaps we need a detailed analysis of why it's not a good 'investment' to bet on the horses. Or to buy a scratchcard or whatever other gambling method there is.

In 'my' opinion, Martin should simply be attacking the government's advertising of PBs as an 'investment'. It clearly isn't. Rather than spending time/effort to explain why it's a 'poor' investment. It isn't an investment at all!

Premium Bonds: Are they worth it? Discussion Area

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