Premium Bonds shock

adonis10

Why the big shock? It's a lottery, like the national lottery. I've got £1,800 in PB's and am happy to sacrifice the £43 post tax interest that I'd get in a year, for the chance to win. I'm not interested in putting much more in because it's simply not worth it. However, as said, sacrificing a paltry amount of interest is fine. Look at the last draw, someone won £50,000 and their holding is a mere £300. Not a bad return. I think putting 10's of £000's in PB's is silly because one may as well get a guaranteed return on most of the cash and leave a bit in the lottery that is PB's.

Just chill out and treat it as what it is; a lottery which would be cool if a decent amount was won, but the chances are that it won't happen.

Reaper

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.

Another claim presented as fact with nothing to back it up. That is how all the premium bonds myths start.

The estate cashes in the bonds and recovers the stake money, though they can be left running for up to 12 months if they wish.

I guess what might happen is that the estate is unaware of the existance of the bonds and therefore does not apply for them, leaving them running. The prizes they generate would then not be claimed, though as they never expire a claim can be made at any point in the future.

However even in that case your argument that dead investors not claiming their prizes means you are being cheated somehow does not hold water. The prizes they decide to award are chosen to be a percentage of the money being gambled. So for example if they decide to award 2% in prizes it would make no difference to you whether half the people playing were dead or not, your average return in prize money would remain 2%.

kar999

Aegis wrote: »

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.

:huh:

If I put £1000 in premium bonds I can get it back... just cash them in. If I spend £1000 on lottery tickets or plave a bet (which is my stake*, on the 3:15 at Kempton I can't get my £1000 back (unless the horse wins!).

*Stake
When placing a bet, your stake is the amount of money you are willing to gamble - be it a cautious £2 or a rather more flamboyant £500. If you're a winner, your winnings (also known as 'returns') are calculated according to your horse's odds.

dunstonh

If I put £1000 in premium bonds I can get it back... just cash them in. If I spend £1000 on lottery tickets or plave a bet (which is my stake*, on the 3:15 at Kempton I can't get my £1000 back (unless the horse wins!).

You are not comparing like for like.

On the premium bonds you are getting no interest. In return you are entered into the Govt tombola.

On the lottery option you have the money in a savings account and you are buying lottery tickets with the interest that money has earned.

In effect, with both options, your stake is the interest payment as that is the bit you are giving up.

kar999

OK I see that angle now... thanks.

As a higher rate tax payer a 3% a/c would mean I could buy only 18 standard lottery tickets a year or 9 Euro ones. Not sure how the odds of winning a prize on that compares to a premium bond win. Both pretty remote I would guess but I see both as a pure gamble rather than an investment anyway.

I've had a punt on tonights first new Tuesday Euro draw as the jackpot is £85m... I'm pretty confident with the odds only being 1 in 116,531,800 http://en.wikipedia.org/wiki/EuroMillions

The chances of being struck by lightning is only about 1 in 500,000 :A

MoneySaverForever

My nana always had Premium Bonds and she never won anything, seem like a waste of money really xxx

brewerdave

Reading this thread made me think about our "investment" in PBs. Had them for ~ 12 years since first redundancy and always "reinvested" the winnings.. I was quite surprised when I worked out the equivalent annual net returns (now easier to do since the new style winnings letters). My net return comes out at 2.74% and my wife's at a poorer 2.2%,always believed that they had been returning more than that!!
They have now been moved to the top of the list of "investments" to liquidate !!

wastedtalent

I must be one of the lucky(er) ones, I've had £700 of premium bonds for about 3 years, and so far had £300 worth of prizes.

Luck of the draw!

Simon1967

kar999 wrote: »

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.

That is exactly what the big finacial bods have said for the last few years that have given poor returns. They give a review on £1000 investments and for what return you would get they say may as well have premium bonds.

dunstonh

Simon1967 wrote: »

That is exactly what the big finacial bods have said for the last few years that have given poor returns. They give a review on £1000 investments and for what return you would get they say may as well have premium bonds.

That doesnt make sense. The last few years have been some of the best on record for investments.

Even if you go back further and include the credit crunch and recession in with that you will find most investors have made more than a savings account and certainly more than premiums bonds getting the average pay out amount.