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  • FIRST POST
    • MSE Eesha
    • By MSE Eesha 20th Nov 17, 12:59 PM
    • 92Posts
    • 21Thanks
    MSE Eesha
    Premium Bond rate boosted from 1.15% to 1.4% should you pile in?
    • #1
    • 20th Nov 17, 12:59 PM
    Premium Bond rate boosted from 1.15% to 1.4% should you pile in? 20th Nov 17 at 12:59 PM
    This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.





    Please click 'post reply' to discuss below.
Page 2
    • chamelion
    • By chamelion 23rd Nov 17, 10:46 AM
    • 157 Posts
    • 121 Thanks
    chamelion
    I have the max having built it up over many years and I have "won" 550 in the last 12 months.
    Originally posted by Bootle Boy
    similar to my above post, getting even 3% on the 50,000 after 40% tax if you're a higher rate tax payer would get you 900.

    You've gambled and made 350 less. Worth it?
    • chamelion
    • By chamelion 23rd Nov 17, 10:48 AM
    • 157 Posts
    • 121 Thanks
    chamelion
    Why are people complaining that they have one bond and never won a prize? Have they not realised that they only have a one in seventy BILLION chance of winning?
    By saving money directly from my bank account over many years, and by re-investing all wins under 5000 , I have managed to build a total of 30,000. Since April this year I have received 11 prizes of 25, one of 50, and one of 100.
    Last month the single 1 bond given to me as a wedding present in 1957, one of the first issued, won 25. So older bonds do sometimes win.
    Good luck to everyone, hope you have a great win.
    Originally posted by REJP
    That's 115 less than you'd have made on a 3% account even after paying a higher rate tax.

    So far all the 'success' stories I'm seeing in this thread indicate people are making less than if they had a few savings / checkings / regular savings accounts.
    • phillw
    • By phillw 23rd Nov 17, 10:58 AM
    • 1,041 Posts
    • 622 Thanks
    phillw
    Here’s something to think about ( for 2 seconds). Which is more likely to win the lottery - 1,2,3,4,5,6 or a random selection?
    Originally posted by qwert yuiop
    We can't know that as they have multiple sets of balls and machines to stop people figuring out if there is a discernible pattern and exploiting it. However 1,2,3,4,5,6 is a very bad choice of numbers because you'd be sharing the jack pot with ten thousand other people.

    I would love to have enough money to max out premium bonds and be happy with the safe return you get from them (which means you must have enough money elsewhere too).

    So far all the 'success' stories I'm seeing in this thread indicate people are making less than if they had a few savings / checkings / regular savings accounts.
    Originally posted by chamelion
    It would take more than a "few" accounts to spread out that 50k. It's not like the old days when you could dump 20k in santander for 3%.
    Last edited by phillw; 23-11-2017 at 11:01 AM.
    • qwert yuiop
    • By qwert yuiop 23rd Nov 17, 11:06 AM
    • 2,136 Posts
    • 1,248 Thanks
    qwert yuiop
    So you've received 100 on a 7000 investment?

    Let's say you got it into some 3% accounts. That's 210. If you're a higher rate tax payer, that's 126.

    Basically you need to win at least once more to make as much as you'd make on a 3% account.

    Is it really worth it?
    Originally posted by chamelion
    Well of course its not, but the point is you might win big, even if its just 500, which would make all the difference. Its portrayed as a sort of risk free gambling, but its not your capital youre gambling with, its the interest on your capital, which is effectively being used to buy lottery tickets.
    • chamelion
    • By chamelion 23rd Nov 17, 11:09 AM
    • 157 Posts
    • 121 Thanks
    chamelion
    It would take more than a "few" accounts to spread out that 50k. It's not like the old days when you could dump 20k in santander for 3%.
    Originally posted by phillw
    OK, that's fair, if you don't want the hassle of multiple bank accounts.

    I've been trying to find a good stash for cash and am evaluating bonds, but just not convinced yet. For e.g. - I could be overpaying mortgage, which has a higher interest rate than the 1.4% i'd get here. Or, I could put more funds into my stocks + shares ISA which I'm currently at +2% since March.

    Sure, I could "win big" but that's just not a sufficiently rational reason to go down this route.
    • qwert yuiop
    • By qwert yuiop 23rd Nov 17, 11:12 AM
    • 2,136 Posts
    • 1,248 Thanks
    qwert yuiop
    We can't know that as they have multiple sets of balls and machines to stop people figuring out if there is a discernible pattern and exploiting it. However 1,2,3,4,5,6 is a very bad choice of numbers because you'd be sharing the jack pot with ten thousand other people.
    .
    Originally posted by phillw
    If there is a discernible pattern, its not random, and the whole things a fraud. If it is truly random, 1,2,3,4,5,6 is no less likely to win than any other pattern (or no more likely).
    • mindwave
    • By mindwave 23rd Nov 17, 11:52 AM
    • 8 Posts
    • 4 Thanks
    mindwave
    Premium Bonds
    Martin, you asked us to let you know our PB winnings. I have mine for the past few years in a spreadsheet, if you would like to see this, please let me know how I can email it securely to you.
    • chamelion
    • By chamelion 23rd Nov 17, 11:59 AM
    • 157 Posts
    • 121 Thanks
    chamelion
    Martin, you asked us to let you know our PB winnings. I have mine for the past few years in a spreadsheet, if you would like to see this, please let me know how I can email it securely to you.
    Originally posted by mindwave
    would you mind sharing high level figures? return % on what investment?
    • Rishtonite
    • By Rishtonite 23rd Nov 17, 10:25 PM
    • 3 Posts
    • 2 Thanks
    Rishtonite
    Moving average winnings
    Since July 2013 I've been using a spreadsheet to calculate my % "interest"
    It has varied from 1% to 2.375% with an average of 1.569%
    That's an average of just over 300/year, which pays for my car insurance :-)
    Maybe I could do slightly better with a high interest account, but I like the "lottery factor" that one of these days I might have a big (1000 or more) win.
    And unlike the National Lottery I'm not actually spending money to get modest winnings.
    • qwert yuiop
    • By qwert yuiop 23rd Nov 17, 10:46 PM
    • 2,136 Posts
    • 1,248 Thanks
    qwert yuiop
    Maybe I could do slightly better with a high interest account, but I like the "lottery factor" that one of these days I might have a big (1000 or more) win.
    And unlike the National Lottery I'm not actually spending money to get modest winnings.
    Originally posted by Rishtonite
    What you’re effectively spending is the interest you would have got if you’d put your money in a high interest account. That’s the way it works - if you don’t win, youve lost your stake.
    Another way to achieve the same result would be to put your money in a high interest account and use the interest paid to buy lottery tickets.
    I prefer to use the interest earned to gamble on sure fire winners like Hillary Clinton and Remain, or something.
    Last edited by qwert yuiop; 23-11-2017 at 10:54 PM.
    • Rishtonite
    • By Rishtonite 23rd Nov 17, 11:04 PM
    • 3 Posts
    • 2 Thanks
    Rishtonite
    What's the average "interest" on Lotto tickets?
    If I "invested" my 300 PB "interest" in Lotto tickets, how much am I likely to win?
    My guess is not very much, so I'd rather opt for the PB winnings and use those winnings for something useful, than buying lottery tickets.
    • qwert yuiop
    • By qwert yuiop 24th Nov 17, 8:27 AM
    • 2,136 Posts
    • 1,248 Thanks
    qwert yuiop
    What's the average "interest" on Lotto tickets?
    If I "invested" my 300 PB "interest" in Lotto tickets, how much am I likely to win?
    My guess is not very much, so I'd rather opt for the PB winnings and use those winnings for something useful, than buying lottery tickets.
    Originally posted by Rishtonite
    Very little - the lottery is the classic mug’s game. What’s the difference between a usual premium bond holding win rate and a high interest deposit account return? Looks like it’s about 1%, even allowing for a fairly good rate of luck. That is the money being used to gamble on the very low possibility of a big prize - that’s your effective lottery ticket squander.
    I’m not saying a premium bond holder is doing the wrong thing - just pointing out what they’re doing. It’s sold as a sort of free gambling, which it’s not.
    Last edited by qwert yuiop; 24-11-2017 at 8:43 AM.
    • Rishtonite
    • By Rishtonite 24th Nov 17, 1:40 PM
    • 3 Posts
    • 2 Thanks
    Rishtonite
    Understood. What you are saying is that if, for example, I won 100 on premium bonds, but could have earned 150 in interest from a high interest account, then effectively I'm spending 50 "gambling" and not winning anything with that 50.
    • polymaff
    • By polymaff 24th Nov 17, 3:08 PM
    • 1,806 Posts
    • 781 Thanks
    polymaff
    Very little - the lottery is the classic mugs game.
    Originally posted by qwert yuiop
    "A Lottery therefore is properly a Tax upon unfortunate self-conceited fools"

    (Sir William Petty, 1662)
    • Oscargrouch
    • By Oscargrouch 1st Dec 17, 5:13 PM
    • 2,823 Posts
    • 13,398 Thanks
    Oscargrouch
    I have won more cash on the Postcode Lottery than National or Euromills. For a 10 DD per month, which supports proper British Charities; you can't go wrong. Especially if you re-invest your PB winnings....
    2.5 kWp PV system, SSW facing, 45 Deg Roof. ABB Inverter, Monitor: 'Wattson'.
    Reg. for FIT Nov 2011. Northants. "It's not what you generate; it's how you use it that matters".

    Definition of 'O's = kWh/kWp (kWh = your daily & accurate Generation figure) (kWp = the rated output of your PV Panels).
    • forgotmyname
    • By forgotmyname 2nd Dec 17, 8:47 AM
    • 26,230 Posts
    • 10,469 Thanks
    forgotmyname
    That's 115 less than you'd have made on a 3% account even after paying a higher rate tax.

    So far all the 'success' stories I'm seeing in this thread indicate people are making less than if they had a few savings / checkings / regular savings accounts.
    Originally posted by chamelion
    What if you already have all the 3% and 5% accounts and still have more to invest but risk free on the funds?

    If you dont win then yes the value will be reduced due to inflation, but you get back what you paid in with a potential for better.
    Its either that or a 0.02% account.

    Does premium bonds make sense then?

    FIL bought 1300 worth and won 75 in the first 12 months.
    Punctuation, Spelling and Grammar will be used sparingly. Due to rising costs of inflation.

    My contribution to MSE. Other contributions will only be used if they cost me nothing.

    Due to me being a tight git.
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