Premium Bonds Question

johnofhertford

5.8% per annum I think, tax free. Pretty good. Whether it's beginner's luck or some other kind, I wish I had it! Well done you jammy so and so.

ReportInvestor

I'm yet again astonished by the heat generated by this ERNIE issue.

It's a nice little earner for the Treasury.
The average person is going to lose out compared to a savings account found via MSE.
But Ernie can have genuine investment uses for a higher rate taxpayer, depending on the rates. [Currently they are beating the best instant access rate but not the best fixed rate.]
Neverthelss it's a bit of a flutter for everyone, without risking your initial stake, and who knows who might get lucky with a life changing £1 million so it's relatively harmless fun by comparison with casinos?

What more is there to say? .

Some people have got lucky and some haven't?

tonecontrol

A lot of stats confuse normal folk. e.g. if a coin lands on heads 10 times in a row, what are the chances of it landing heads up again? 50% of course. The only time I use this type of thing to my advantage is with lottery tickets if I buy them: I avoid numbers below 31, and pick consecutive numbers (e.g. 41,42,43,44,45,46). My reasoning is that by avoiding birthdates and picking numbers that seem less likely to occur, then you are less likely to share if you do win.

whambamboo

tonecontrol wrote:

A lot of stats confuse normal folk. e.g. if a coin lands on heads 10 times in a row, what are the chances of it landing heads up again? 50% of course. The only time I use this type of thing to my advantage is with lottery tickets if I buy them: I avoid numbers below 31, and pick consecutive numbers (e.g. 41,42,43,44,45,46). My reasoning is that by avoiding birthdates and picking numbers that seem less likely to occur, then you are less likely to share if you do win.

so you understand probability and independent random events, but still can't grasp that the lottery is awful? You get back 50% of what goes in. Any investment looks to pay over 100%. You'd be better off playing slot machines.

johnofhertford

tonecontrol wrote:

A lot of stats confuse normal folk. e.g. if a coin lands on heads 10 times in a row, what are the chances of it landing heads up again? 50% of course.

Unless you're a Bayesian, in which case the 10 heads may change your prior!

You're assuming also that the coin is fair.

johnofhertford

whambamboo wrote:

so you understand probability and independent random events, but still can't grasp that the lottery is awful? You get back 50% of what goes in. Any investment looks to pay over 100%. You'd be better off playing slot machines.

Statisticians can be compulsive gamblers too you know. It all depends on how much utility is derived from the excitement of the bet.

oxters

Does anyone know a comparison between savings of say K20 @ 6% against likely (average) return from Ernie for the same sum?

oxters

tonecontrol wrote:

A lot of stats confuse normal folk. e.g. if a coin lands on heads 10 times in a row, what are the chances of it landing heads up again? 50% of course. The only time I use this type of thing to my advantage is with lottery tickets if I buy them: I avoid numbers below 31, and pick consecutive numbers (e.g. 41,42,43,44,45,46). My reasoning is that by avoiding birthdates and picking numbers that seem less likely to occur, then you are less likely to share if you do win.

Ah. so that's how it's done. Big mistake publishing it here though. They'll all be doing it now. I think you're right about frequency of birthday punters but a lot of solo jackpot winners picked numbers below 31. I don't think 6 consec numbers have come up yet though, have they?

oxters

oxters wrote:

Does anyone know a comparison between savings of say K20 @ 6% against likely (average) return from Ernie for the same sum?

According to Ernie it's over 3% - just checked. That's not bad.

My father bought me a £1 p.b. when I was ten (big spender) and I still have it. Hasn't won a bean in 50 years - I checked.

nsandiexpert

Premium Bonds are down to the luck of the draw. You are right in saying that each £1 bond has a seperate and equal chance of winning and of course people with more bonds will win more.
Consec numbers has nothing to do with it either. If you have 30k - you have 30,000 numbers. If you have £5 from 1967 you have 5 numbers.
That isn't to say it won't win - but compared to the millions of people who have 10k plus - you don't stand much of a chance.

Although, someone did win the million a few years ago with £7 in their holding!