Premium Bonds

Fat_Boy

adminannie wrote:

This is just a passing thought at the minute, but what is everyones idea of buying £2000 of premium bonds.

I wouldnt get much interest on that amount but what are the odds of having a few wins

Any thoughts on this Annie

My wife has 2k worth of bonds and has had for a while now (a year or so). So far not a sniff of a win

Gorgeous_George

amosworks wrote:

A lottery?
Unlike the lottery, with bonds you can get your investment back even if you don't win

Have you TRIED returning a losing lottery ticket??

That's not the point.

With PBs you are gambling the interest you could have earned in the hope of winning prizes in what can only be described as a lottery. So, if I invested £10K in PBs rather paying it off my mortgage (5.25%), I'd be gambling £525 per year in a lottery.

With average luck I would theoretically 'win' £295 but with two £1m winners each month, the average would be less than £295.

Winning £295 would be more truthful if expressed as losing £230 (£525 - £295).

There are a few winners and many losers - just like the lotto.

The only guaranteed winners are the organisers - in this case, it's the government. We complain about taxes so often yet seem happy to pay money to the government if it's disguised as a competition.



GG

chesky369

I guess we premium bond holders who actually quite like holding them should be discouraging everyone from buying them - leaving us a better chance of winning. Or is there something wrong with my logic?

meanmachine_2

I suggest you all save your typing fingers and refer to the MASSIVE thread on this subject further down.

You really will save yourselves time, if not money.

To the OP: No, 2K isn't worth bothering with, unless you plan to ramp up your investment to the max very shortly.

PBs only make moneysaving sense if:

You pay 40% tax
You've used up your cash ISA allowance
You don't have debts that need paying off.
You "invest" at least 24,000

Gorgeous_George

meanmachine

I agree that it is a better investment for higher rate tax payers and would amplify that the debts that need paying off include any mortgage other than BTL.

The rest is so illogical.

The more you own, the more you lose. You will only 'win' 2.95% per year. Even a 40% tax payer could get that in the bank.

Your investment should be based on how much you wish to gamble i.e., how much interest you can afford to lose.



GG

adminannie

Hi Thanks to everyone for their opinions, I really cant make up my mind so I will leave it abit longer to decide Annie