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  • FIRST POST
    • Former MSE Wendy
    • By Former MSE Wendy 24th Jul 07, 3:20 PM
    • 868Posts
    • 1,782Thanks
    Former MSE Wendy
    Premium Bonds Article Discussion Area
    • #1
    • 24th Jul 07, 3:20 PM
    Premium Bonds Article Discussion Area 24th Jul 07 at 3:20 PM
    This thread is to discuss the
    Premium Bonds: Are they worth it?
    article


    Also see the
    Premium Bond Probability Calculator
    to discuss the calculator specifically see the

    Premium Bond Calculator Discussion.

    To take part, click reply.
    Last edited by MSE Martin; 24-07-2007 at 5:19 PM.
Page 1
  • NeilW
    • #2
    • 25th Jul 07, 3:05 AM
    Do the lottery
    • #2
    • 25th Jul 07, 3:05 AM
    Interesting article.

    There is one comparison that you missed, which is to take the 'excess' interest (ie everything above 3.8%) you earn putting your money in a savings account and buying a bucket load of tickets in the National Lottery when they have one of those super rollover/super draw things.

    It'd be interesting to see how the probabilities of doing it that way stacked up against Premium Bonds and straight savings.

    I'd love to know what is the most probable way of becoming a millionaire given an investment of £1000 :-)

    NeilW
  • tightwadman
    • #3
    • 25th Jul 07, 9:29 AM
    Premium Bonds
    • #3
    • 25th Jul 07, 9:29 AM
    A year back I had the full £30,000 investment in premium bonds and with that amount I should have been winning at least one prize every month. It didnt happen. Four months produced no prize at all. One month produced three wins - two £50 and one £100 and all the rest were just £50.

    Frankly I lost money as I would have received over £1000 more than my winnings had I left the money in a high interest account I had. Dont even think about Premium Bonds as an investment and frankly if you cannot win with £30,000 worth what do you think your chances are with the odd bond or two or even a thousand? Only the stinking rich should think about putting money into bonds.

    Frankly the experience has made me hugely cynical and I dont believe there are in fact any winners of the big prizes. I have seen no evidence and the winner is always anonymous. Surely by now someone would have come forward to explain what they did with their mill ?

    Steer well clear of premium bonds!
  • Alan50
    • #4
    • 25th Jul 07, 9:42 AM
    Premium Bonds (1M prize)
    • #4
    • 25th Jul 07, 9:42 AM
    I have held PB for 20 years (currently hold 14K) my rate of return is between 2-6% a year, I would agree with most posts that its not the best way to invest, but you do have a chance of the 1M!
    I am not a mathamatician but I have taken a note of the holdings of PB 1M winners over the last 4 years...90% of winners have the maximum holding of 30K....the more you have the better the chances?

    If you have a PB a/c No. you can veiw on-line the high value winners, date the winning PB was purchased and the holding quatity www.nsandi.co.uk

    Alan
    • bazster
    • By bazster 25th Jul 07, 10:01 AM
    • 7,326 Posts
    • 9,448 Thanks
    bazster
    • #5
    • 25th Jul 07, 10:01 AM
    Go to the Casino...
    • #5
    • 25th Jul 07, 10:01 AM
    I once read some very succinct advice on PB's. It went something like this:

    PB's are nothing but a way to gamble your interest. If you want to gamble your interest, put your money in a savings account. Each month, withdraw your interest and take it to the Casino. The odds are better.
    • Moniker
    • By Moniker 25th Jul 07, 11:37 AM
    • 621 Posts
    • 9,607 Thanks
    Moniker
    • #6
    • 25th Jul 07, 11:37 AM
    Premium Bonds
    • #6
    • 25th Jul 07, 11:37 AM
    My mother-in-law swears that holding premium bonds in a block wins you prizes more often than if they are held individually. I have round £2000's worth in £50 units. Should I cash them and buy a block of 2000 which would give me consecutive numbers? Advice/experience welcome.
  • toomuchtotty
    • #7
    • 25th Jul 07, 12:45 PM
    • #7
    • 25th Jul 07, 12:45 PM
    i have £30,000 of premium bonds which I have had invested since December 2005. My first eligible draw was Februaury 2006 and since then I have received prizes totalling approximately £1400. I'm not sure whether I should stick with premium bonds or whether I should move my money. I intend to keep the money in savings until my partner and I move from our rented house and buy a house together. This may be another 12 months away or more. I would welcome some advice as to where I would be best to keep my money.
    • baby_boomer
    • By baby_boomer 25th Jul 07, 1:26 PM
    • 3,753 Posts
    • 5,373 Thanks
    baby_boomer
    • #8
    • 25th Jul 07, 1:26 PM
    • #8
    • 25th Jul 07, 1:26 PM
    My mother-in-law swears that holding premium bonds in a block wins you prizes more often than if they are held individually. I have round £2000's worth in £50 units. Should I cash them and buy a block of 2000 which would give me consecutive numbers? Advice/experience welcome.
    Originally posted by Moniker
    Should you cash them in? Yes. Should you buy PBs with the proceeds? No. You could put it into a cash ISA and get 6% gross = £120 pa.

    Over the years the compound interest earned could provide you with security or a substantial treat.

    Do you also consult your m-i-l on important matters?

    I have held PB for 20 years (currently hold 14K) my rate of return is between 2-6% a year
    Originally posted by Alan50
    For comparison purposes, bank base rates over that 20 year period fluctuated from 9% to 10% to 7.5% to 15% to 10% to 12% to 5.25% to 6.75% to 5.75% to 7.5% to 5% to 6% to 3.5% to 5.75%.
    Last edited by baby_boomer; 25-07-2007 at 1:36 PM.
  • dzug
    • #9
    • 25th Jul 07, 2:06 PM
    • #9
    • 25th Jul 07, 2:06 PM

    I'd love to know what is the most probable way of becoming a millionaire given an investment of £1000 :-)

    NeilW
    Originally posted by NeilW
    Don't you mean least improbable?
  • miaxmia
    A year back I had the full £30,000 investment in premium bonds and with that amount I should have been winning at least one prize every month. It didnt happen. Four months produced no prize at all. One month produced three wins - two £50 and one £100 and all the rest were just £50.

    Frankly I lost money as I would have received over £1000 more than my winnings had I left the money in a high interest account I had. Dont even think about Premium Bonds as an investment and frankly if you cannot win with £30,000 worth what do you think your chances are with the odd bond or two or even a thousand? Only the stinking rich should think about putting money into bonds.

    Frankly the experience has made me hugely cynical and I dont believe there are in fact any winners of the big prizes. I have seen no evidence and the winner is always anonymous. Surely by now someone would have come forward to explain what they did with their mill ?

    Steer well clear of premium bonds!
    Originally posted by tightwadman
    I have to disagree - did the same just over a year ago and have won every month, except one, usually multiple wins of £50/£100 and won month we won £500. We have made more in the past year than in a high interest bank/building society account.
    • torbrex
    • By torbrex 25th Jul 07, 3:32 PM
    • 67,726 Posts
    • 124,643 Thanks
    torbrex
    Must be something wrong with my thinking, I dont look on my PB's as an investment, I see them as a gamble, I used money that I had spare and bought my bonds with no thought of regular returns, rather, I am waiting and hoping for the big win like I do with any other gamble that i do.
    Surely no-one buys a lottery ticket or bets on a horse as an investment so why even look at PB's that way. Yes the money can be reclaimed at face value but if like me you were to buy the bonds with 'lost' money then you can settle back and hope for a win rather than expect one.
  • meanmachine
    I have to disagree - did the same just over a year ago and have won every month, except one, usually multiple wins of £50/£100 and won month we won £500. We have made more in the past year than in a high interest bank/building society account.
    Originally posted by miaxmia
    So you're one "winner" out of a thread of losers - including myself.

    Let's see if you're as lucky over the next 12 months.

    Personally I think they're a waste of time.
    • aurorahelios
    • By aurorahelios 25th Jul 07, 4:09 PM
    • 372 Posts
    • 2,015 Thanks
    aurorahelios
    We see them as a gamble too, we've got investments elsewhere. Premium bonds are bought with spare money, anything we get from them is a bonus. Over the past 4 years we've had returns between 2-7%.

    The winnings are also tax free and thus non-declarable for tax credits and if like our household you are on the threshold for receiving tax credits then that has to be accounted for.
  • tightwadman
    PB's
    I have to disagree - did the same just over a year ago and have won every month, except one, usually multiple wins of £50/£100 and won month we won £500. We have made more in the past year than in a high interest bank/building society account.
    Your sums just dont add up. Assuming you had invested the full £30,000 and left it in for a year AND won £500 one month and then had multiple wins every other month ( which frankly I can barely believe) you would have HAD to have won £150 every other month except 2 to give you exactly £2000 which yes would beat a High Street rate of 6.25% producing £1875 before tax.

    If you won TWICE every other month with 2 £50 cheques that would give you just £1000 and if you had some £100s maybe £1250.

    Do the sums - PB's DONT pay!
  • Transition
    I'm new to this website and forum, and I have read these posts with interest. I have had £200 invested and have had 2 x £50 returns this year.

    I have just invested to the £30k you are allowed. This is money that I didn't have before so I figured I will still have it at the end no matter what, and you never know, I might be lucky, but if nothing happens, I still have my £30k to invest elsewhere. That's my way of looking at it anyway, no doubt some others will be shaking their head, but that's okay by me....
  • Comper21
    Ive invested 25k and have it invested in one block. Only had them for six months, but have won £250 all in £50 multiples. However, ive won nothing for the last two months when I calculated that I should be winning at least 12 prizes a year (based on someone with average luck).
    Do fellow readers recommend changing numbers regularly?
  • The Bleurk
    Quite Right
    Further to my points in the calculator thread...

    The fundamental issue here is that Premium Bonds are a gamble not an investment for certain returns.

    It is interesting to note that professional financial advisers (with no axe to grind on the question as they get nothing from it) all recommend using premium bonds as a means of retaining a proportion of your investments in what they call 'near cash' - this is as an emergency reserve. This is so that you do not have to call on long term investments in an emergency and spoil the returns or worse encounter penalties.

    I suppose its a kind of each way bet - you have the funds if you need them reasonably accessible (penalty free) in case of bad fortune - AND you get a chance to hit the big time.

    The longer you hold the bonds the more likely you will get your fair share of prizes which will average out to the interest rate value. BUT some will tend to miss out and some will tend to benefit....

    As they say you have to be in it to win it.

    For the record I have won 54 times in 36 months with a max £30 invested and averaged £60 a time which equates to 3.07% compound - or 5.1% equivalent for higher rate tax payer.

    So I am missing out on marginal interest of about £1 a day for a 1 in 600,000 chance at a million every month. Seems like a good bet to me!!



    BTW putting that same money on the lottery would give about a 1 in 450,000 chance at the jackpot every month (but you might well have to share it and you get nothing back if you lose)
    Last edited by The Bleurk; 25-07-2007 at 5:54 PM.
    • Moniker
    • By Moniker 25th Jul 07, 6:26 PM
    • 621 Posts
    • 9,607 Thanks
    Moniker
    I agree. I started buying premium bonds when the lottery started as I reckoned that I would not lose my 'stake' and could always take the cash elsewhere or use use it if required for an emergency. I still don't know whether I should cash them in and buy a single consecutive block though. Does it affect the odds if my numbers are next to each other?
  • The Bleurk
    No difference
    Moniker - it makes absolutely no difference if your numbers a spread out or en bloc nor if they are new or old. Its a random process.

    It never ceases to amaze me how the urban myths develop around this.

    You pays your money and you takes yours chance....
  • Jonnykipper
    Yes and No
    I found this article very interesting.

    My wife and I have had £30k each in premium bonds for the last 22 months. Neither of us look at them as the best thing we could invest in, but someone has got to win the bigger prizes and you have got to be in it to win it!

    From our perspective....

    I think they are great (£3,250 won including 3 x £500).

    My wife is less enthusiastic (£1,400 won, biggest prize = £100).
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