Premium Bonds shock

Sceptic001

Reaper wrote: »

I doubt you remember that right. More likely the article was discussing common myths as this is one of the classics. As the NS&I says:

No, I think JakesGran may be correct. Many years ago while working for Post Office Counters there was a popular belief amongst customers that notifying the PSB office of a change of name/address etc. would result in a prize win. I didn't give this much credence, but strangely I recently registered online to have prizes paid into my account and the following month won three prizes after a long drought.:j

ViolaLass

Sceptic001 wrote: »

No, I think JakesGran may be correct. Many years ago while working for Post Office Counters there was a popular belief amongst customers that notifying the PSB office of a change of name/address etc. would result in a prize win. I didn't give this much credence, but strangely I recently registered online to have prizes paid into my account and the following month won three prizes after a long drought.:j

Gosh, it must be true then.

Morrisha

The point is NS&I carry on generating numbers for the deceased long after the dead mans estate can claim the cash. Ie the bond numbers do not continue generating wins for the owners into perpetuity. The winnings for these numbers are trousered by NS&I.

ViolaLass

Morrisha wrote: »

The point is NS&I carry on generating numbers for the deceased long after the dead mans estate can claim the cash. Ie the bond numbers do not continue generating wins for the owners into perpetuity. The winnings for these numbers are trousered by NS&I.

Source? Proof?

noodle

I've held Premium Bonds for a couple of years and my net return is almost identical to the best savings rates (i.e. awful). This does mean that I've won more than, on average, I might have expected to.

I think they're worth a punt whilst savings rates are so low. You don't forgo much interest, and in return you have a chance, however small, of getting a decent win to beat the market hands down. Yes, it's a lottery (aka 'stupid tax') but why not?

I wouldn't hold £30k's worth as part of an investment strategy, but to keep some safe 'rainy day' money somewhere... well I'd rather help reduce the national interest bill and give myself a little chance of a good win than help line the pockets of a bank who's paying me an absolute pittance.

Loughton_Monkey

This is all a great myth. Random Number generation is - in actual fact - rather more complicated than people think. But to believe there is 'hanky panky' is rather silly. There are several stages in the process, but I am sure it's 100% Kosher.

The only 'wrinkle' to it would be a small percentage (but large number) of prizes awarded to bonds that remain 100% valid, but otherwise unclaimed and unknown about - possibly granny destroyed the things in error before she died.....

Just like any bank, there is always a small amount of unclaimed money (dormant accounts) which can legally be 'disposed of' after a period of time. Mostly, these would go to charity or good causes or used for a specific purpose.

The only reason people don't win is that they don't understand the miserably low chances of winning. When they say (e.g.) 1½% average payout, then the 'big' prizes (to a handfull of people) take up a good proportion of this. So only, maybe, 1.2% going to 'chicken feed' prizes.

Best to put your £5,000 in a nice little 3% jobbie. Take the £150 interest out each year and spread it over 15 different accumulators at Haydock Park......

grizzly1911

When I did my investment exams a while back PSBs were seen as good option if you were a high rate tax payer (winnings are free of tax) and part of balanced portfolio with the surplus funds.

kar999

I have a £1000 in premium bonds on the basis that the amount of interest lost compared to an instant access saving account is not that great in £note terms and a twice weekly lottery ticket would cost more. There's always the "remote" chance of winning something bigger. Yes I know it's a lottery and an awful saving rate of return.. It's gambling but unlike the lottery or the bookies at least you can get your original stake back ... win or lose.

Eco_Miser

Morrisha wrote: »

The point is NS&I carry on generating numbers for the deceased long after the dead mans estate can claim the cash. Ie the bond numbers do not continue generating wins for the owners into perpetuity. The winnings for these numbers are trousered by NS&I.

ERNIE a random number generator. It doesn't know which numbers belong to bonds that have been cashed in, or belong to deceased holders. It might generate any number ever issued, or any not yet issued in the current series. Then a computer (ERIC) checks the numbers, and any number not matching a valid bond is discarded.

Aegis

kar999 wrote: »

It's gambling but unlike the lottery or the bookies at least you can get your original stake back ... win or lose.

No, you can't. Your stake is the interest you would otherwise have received on your savings balance, so it is lost if you don't win anything.