Premium Bonds

Rollinghome

darich wrote: »

And to the those who are seemingly mocking the idea......

Good for you. They may not be the best investment ever but for anyone who likes a flutter seem a decent deal to me. The tax-free 1.5% going into the prize fund is better than the taxed 0.20% on an NS&I investment account though not quite as good as the tax-free 2.5% for the NS&I ISA.

So £1k in PBs is costing a tenner a year compared with the return from the ISA. Sounds a cheap way to have a flutter to me. Anyone who put money into shares in 07/08 to find their value had halved by March this year might think so and anyone who invested in the FTSE 10 years ago to find it's still down 20% on those levels today might agree.

Err, no, I don't buy PBs and sold mine when I was 12 to buy a bike. I take my chances with the markets now but maybe in 10 years time will wish I'd gone with the smart money and bought PBs instead. Doesn't pay to be too smug before the weigh-in.

Gorgeous_George

Is it better to save the capital but gamble the interest on the Lotto or the horses.

I think PBs are pants but my biggest complaint is that people refer to them as investments. If PBs are an investment then so is a fruit machine.

I don't think that you can buy them with a credit card. Not sure if that has any bearing on the OP.

GG

opinions4u

darich wrote: »

I have some premium bonds and realise that they devalue slowly and that they don't pay interest in the same way as a bank account.
However, in the 18months since I bought mine, i've won £175 in 4 prizes.

Which is a meaningless amount unless you clarify your holding.

I've won £50 in 10 years. On a holding of £100.

And to the those who are seemingly mocking the idea......every month someone wins £1m and several others win tens of thousands, as I'm sure you know.......would you mock them for having premium bonds too?

Every big prize paid out means that there are fewer smaller prizes.

So the average return to those who only win smaller prizes is significantly less than 1.5%.

Look, if you use the logic that you "might win £1m" as the driving force, why not save your money in an interest paying savings account and buy EuroMillions tickets with the interest when there's a £70m+ prize fund?

I can see a vague benefit in PBs to a higher rate taxpayer who's risk averse and used up everything else that's available. Even then it's a borderline case.

George is right. They're pants.

Rollinghome

Gorgeous_George wrote: »

I think PBs are pants but my biggest complaint is that people refer to them as investments. If PBs are an investment then so is a fruit machine.

So like shares but with limited downside risk then?

Lots of peeps like me put their money in shares and we call those investments. Don't think should patronise those who have different priorities to us.

darich

opinions4u wrote: »

Which is a meaningless amount unless you clarify your holding.

I've won £50 in 10 years. On a holding of £100.

Every big prize paid out means that there are fewer smaller prizes.

So the average return to those who only win smaller prizes is significantly less than 1.5%.

Look, if you use the logic that you "might win £1m" as the driving force, why not save your money in an interest paying savings account and buy EuroMillions tickets with the interest when there's a £70m+ prize fund?

I can see a vague benefit in PBs to a higher rate taxpayer who's risk averse and used up everything else that's available. Even then it's a borderline case.

George is right. They're pants.

if you think they're pants, don't buy them.

I may well have divulged in another thread how much my holding is but since you asked, i'm not saying
I do know that the prize money I won is significantly more than any interest i would have earned.
it's also nothing like the lotto...because in the lotto it costs £1 to enter. you pays your money and takes you chance
With premium bonds, you pay the same pound to enter, but if after a few months you decide you don't like it you get your money back...unlike the lottery.
if i used the interest from an interest paying account it would take ages to get enough interest to buy a ticket......but with bonds my entire account would effectively be buying a ticket but i can get a refund if i don't win.

It's not an investment because it's simply a non-interest savings account and when interest rates are around 3% at best, a £1000 account would only pay £30 in a year before i've been taxed. net interest of around £22 is barely a lottery ticket per fortnight. I don't do the lottery so my interest is effectively my gamble.

EDIT: my premium bond holding is miles away from the maximum...it's not even 5 figures so my winnings are WAAAAY ahead of any interest.

Gorgeous_George

There are many gamblers that win too. Doesn't make horse racing an investment - just makes them lucky.

I have 500 x PBs and no desire to buy more at the moment. I consider it as gambling.

GG

Rollinghome

Gorgeous_George wrote: »

I consider it as gambling.

Sure it's gambling. It's using the interest you might have got elsewhere as a stake. Everyone who buys them will understand that. The point being that, ignoring inflation, you never risk losing the original capital unlike the stockmarket etc or make William Hill rich. So except for those with religious objections I don't see the problem.

Gorgeous_George

Rollinghome wrote: »

Sure it's gambling. It's using the interest you might have got elsewhere as a stake. Everyone who buys them will understand that. The point being that, ignoring inflation, you never risk losing the original capital unlike the stockmarket etc or make William Hill rich. So except for those with religious objections I don't see the problem.

If you save the capital with a leading Building Society and invest the interest in the stockmarket etc., you never risk losing the original capital.

They are the same.

.. and I don't see horse racing or fruit machines on the Savings and Investments board.

GG

Primrose

You can buy premium bonds online using a DEBIT CARD, but unfortunately not a CREDIT CARD.

Rollinghome

Gorgeous_George wrote: »

If you save the capital with a leading Building Society and invest the interest in the stockmarket etc., you never risk losing the original capital.

They are the same.

.. and I don't see horse racing or fruit machines on the Savings and Investments board.

GG

Yep, lots of ways of not losing the original capital. Including premium bonds. If you invest the interest from a building society in premiums bonds you won't lose either the original capital or the building society interest: you will just not get additional interest on that interest because that goes into the prize pool. Those who invested in Northern Rock plc lost both their dividends and capital. Spot the difference?

I don't see horse racing or fruit machines on this board either so that's at least two of us. Perhaps there aren't any?

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