Premium Bonds Question

Cypher

I have approx £2k of premium bonds which have been bought over 4 years. I only buy them £100 at a time, so all my numbers are scattered about, I also have some automatically reinvested winnings which means I also have a few £50 bonds as well as the £100s.

Is there any advantage in cashing them in and buying back to get all the numbers in one bigger block rather than having them scattered about ?

I hadn't thought about this before, but today I was told to try it by a guy at work, he said he now wins much more often (for the same investment) since he moved all his bonds into larger blocks.

I don't see how it would increase you chances, infact I think it would lower them as for one month you would miss out on a draw.

any thoughts on this ?

johnofhertford

This is just one of the many myths surrounding Premium Bonds. Every bond has an equal chance of winning, whether it's bought in a large block or a small one.

The other good one is "newer bonds have a better chance of winning thanb old ones", which just means that when newer bonds are bought they have to be bought in larger quantities, and the greater the number of bonds the greater the chance of winning.

You're right by the way, if you took them out and repurchased then you'd lose one month's entry, so your total chance of winning in a year would go down.

If your colleague's winnings have increased then he's hit a lucky patch, no more.

Cypher

I did think about the new bonds issue as being a possible reason for a better hit rate as I'd also heard that newer bonds seem to win more often.

I've always ignored that one as being purely down to the fact that lots have people have taken advantage of the increased limit to £30k and premium bonds appear to have become more popular as people stop doing the lottery. This was the reason we started buying PBs, our lottery winnings in the works syndicate dried up so we switched the syndicate over and started buying premium bonds.

Thanks for the replies, I'll leave mine as they are cheers :beer:

kenshaz

I still believe that the chances of stopping in a section or block is higher,just seems logical to me,but I would not withdraw and repurchase,but if you buy in October,as a one off they are allowing them to be eligible in December,so worth a chance

johnofhertford

That's not at all logical. Bond numbers are selected at random, with every bond having an equal chance of being selected. (It's not a man in a red hat twisting a wheel!)

If it helps, imagine every bond as a card in a pack, and the pack is completely shuffled before a card is selected.

Why are the British people so stupid that they keep propagating these myths.

http://www.nsandi.com/products/pb/surprisingfacts.jsp#randomness

kenshaz

johnofhertford wrote:

That's not at all logical. Bond numbers are selected at random, with every bond having an equal chance of being selected. (It's not a man in a red hat twisting a wheel!)

If it helps, imagine every bond as a card in a pack, and the pack is completely shuffled before a card is selected.

Why are the British people so stupid that they keep propagating these myths.

http://www.nsandi.com/products/pb/surprisingfacts.jsp#randomness

So you are in the know are you,have you inside information or is your link to National Savings propaganda just a question of brain washing,governments are into propaganda ,please show the mathematics on which you base your theory.Just look at the big winners and see that they have £5000,£10000, up wards in bonds ,the figures are there to see with the results,we are not talking about cards we are talking about a computer.Now the lotto is a different kettle of fish ,because no one buys £20000 tickets and they are not in blocks.If I was offered £30000 consecutive numbers against dispersed numbers I know what I would pick ,but you stick to your position.

johnofhertford

kenshaz wrote:

So you are in the know are you,have you inside information or is your link to National Savings propaganda just a question of brain washing,governments are into propaganda ,please show the mathematics on which you base your theory.Just look at the big winners and see that they have £5000,£10000, up wards in bonds ,the figures are there to see with the results,we are not talking about cards we are talking about a computer.Now the lotto is a different kettle of fish ,because no one buys £20000 tickets and they are not in blocks.If I was offered £30000 consecutive numbers against dispersed numbers I know what I would pick ,but you stick to your position.

I point you to the certificate issued every month by the Government's Actuary Department. If you can point us to these results that you say are there to see, then please do, because we can all go and sue NS&I for fraud.

It's extremely likely that big winners will have more bonds than those who don't win, because they have more bonds - someone with 10,000 bonds has 10,000 times as many chances of winning than someone with one bond. Whether the're all consecutive numbers or not is totally irrelevant.

(The cards analogy was an attempt to make it understandable even to you, but obviously not even that was simple enough.)

kenshaz

but the big winners all have consecutive numbers,what more proof do you need,of course you get the occasional 5 pound winner,there must be millions of small groups ,but large consecutive groups win ,just look at the results

Cypher

The guy who mentioned it to me, when I said I hardly ever won, had two things to say.

1) you don't win cause you ain't got enough bonds.
2) your bonds are too spread out.

Yes this guy has a decent holding (I'm not sure how much). He bought his bonds in a similar fashion to me just over a longer period.

What he did say, which to me dismisses the holding size issue, was that he cashed all his in and bought in larger chunks. His holding stayed the same. Yet his wins increased.

Now whilst I do agree with the draw is completely random and every single bond has the same chance of winning, I am curious of this guys findings that with the same holding spread about his win rate was poor, but on changing to large blocks his win rate immeadiately improved. Now as its a random draw this could purely be down to chance, I posted this question to see if this was the case.

It's sad to see that the thread has started to become argumentative as soon as people disagree on things. I don't need speaking down to or being acused of being British and Stupid. I may be English but I certainly ain't stupid.

I just wanted to see if this had been repeated by any other people or if my mate has just hit a lucky streak. As I said at the beginning, Mathematically I don't see how, infact I see it as less likely as you end up missing a draw.

I put some money into premium bonds for the chance of winning a decent amount ahead of what I would of got leaving it in a savings account. Anything that gives me an edge on all the other millions of investors how ever small I will investigate with an open mind even if it does at the time seem unlikely.

kenshaz

albertross wrote:

So you are saying that the reason people win in this list, is because they tended to buy in clumps of £5000? (the penultimate column), rather than the fact that they have on average 20000 premium bonds?

http://www.nsandi.com/products/pb/winnerlist.jsp

Multiple clumps,easy to see,the big winners buy in large clumps,multiplied ,odds increased

whambamboo

Cypher wrote:

The guy who mentioned it to me, when I said I hardly ever won, had two things to say.

1) you don't win cause you ain't got enough bonds.
2) your bonds are too spread out.

Yes this guy has a decent holding (I'm not sure how much). He bought his bonds in a similar fashion to me just over a longer period.

What he did say, which to me dismisses the holding size issue, was that he cashed all his in and bought in larger chunks. His holding stayed the same. Yet his wins increased.

Now whilst I do agree with the draw is completely random and every single bond has the same chance of winning, I am curious of this guys findings that with the same holding spread about his win rate was poor, but on changing to large blocks his win rate immeadiately improved. Now as its a random draw this could purely be down to chance, I posted this question to see if this was the case.

When he moved from holding small chunks to one big block there was two things that might happen:

he won more
he won less

It's 50/50 that either of these would happen

That's proof of nothing.

One single example of superstition does not mean anything.

Every number has exactrly the same chance.