Premium Bonds: Are they worth it? Discussion Area

Bloater_2

I won a £5000 prize last year and a £500, also some smaller ones, a total of £6500. Yes, I have the full £30,000 holding but it was still a very good rate of "interest". I've not done so well this year but there's still hope! I've still got my £30,000 which I probably wouldn't have if I's put it on a horse!

cher_john

My granddad buys my kids £100 of premium bonds each birthday, my daughter who has just turned four had three wins by the age of three, two £50's and a £500. So far she has been the luckiest of the three kids. I would not have bought these for my kids but my grandad likes to do it so that when they are grown up they will all have some money behind them.
Although there are definitely better investments my kids love it when they get a letter telling them they have won something.
I have a £1 pb which I have had 27 years and it has never won me anything. Boohoo.

toria27

I am always thinking should I cash in mt pm and put them to better use. Especially as things are getting tighter and tighter as the months go on and credit card bill is going up each month (still managing to pay it off in full phew!) My dad always tells me not to do it as you never know if you will win. However he has the maximum amount of pm and wins £50-£100 most months won £10,000 a few years ago!
Me on the other hand, I have £2000 I won £100 the first ever month I bought pm and now 12 years later havn't won a thing.
Should I cash them in?? still unsure even after reading martins article.

pmd

I think everyone and their kids ought to have a handful of PBs so that you've got an excuse to daydream without the waste of doing the lottery each week! We bought £5 each as christening presents for the nephews, back in the days when you could buy them like that: it's a shame that the minimum is now £100.

Interesting calculation about the "Plan B" of sticking some money in an account and using the interest to buy lottery tickets every week, but I think I'll stick with my PBs.

tightgitttt

I've just put £30,000 into PB while i look for a good investment. Can anyone point me in the right direction where i can invest £40,000?

faineant

Surely nobody really thinks of premium bonds as a sure way of making money? Even Sir Alan Sugar donates his fee to charity. They are a flutter and as Martin points out a place for some spare cash. For some even £30,000 might be spare cash - it depends on your own circumstances. The risk is the interest (which with most investments can go up or down) that you could have elsewhere. Don't be a spoilsport Martin - its fun to anticipate the big win every month.
... and even the old ones do win - a bond bought in the late 1950s did win the £1m not so long ago and the holding was only a couple of pounds.

lovefool

whambamboo wrote:

meh, the nerdy stuff at the bottom is pretty much worthless.

It's the same as anything else: if there is a big payout it inflates the mean.

Just the same as if there are 10000 rich bankers earning £10m a year, they make the mean wage higher than the median.

But I don't quite see the point of the maths. The mean is the mean: you can't exclude half the prizes!

You might as well say if we took the top 20% richest people in the country away, we'd be poorer than Romania, it's just meaningless.

There is no reason to exclude part of the return, just because it's unlikely to happen. If we did this, we might just as well say we should take all the safety devices out of aeroplanes beause they are unlikely to crash.

People in every month!

The return is the return, and it's not great, so the first part of the article is good, and it is worth saying that most people will win less than the mean (it's just like a slot machine in this respect), but the stuff at the end about effective interest rates is very misleading.

Yes the true mean is the true mean, over time. 100k or 1m prizes weight the mean a lot but are very very few and far between. So over 500 years the mean will be true but over say 20 years or less, 99% of cases will not win either of these prizes so the probable mean will be lower.


:beer:

Alan50

I have 13K in premium bonds, and have invested a small amount over the last 20 years. I do win from time to time £50 and £100 which certainly brightens my day. (normal return 1.5-2%/year)
Martin is correct with his article, but may I add from my study point of veiw
(nerdy) that you can check the large winning numbers on the https://www.nsandi.co.uk web site (so long as you have a PB No.) and as of the last 4 years (48 draws) all winners of the £1M. prize have had £20-£30K in Premium Bonds...
Good Luck
Alan

Murphy_The_Cat

If you know anyone who has been fortunate enough to win a biggie on the PB's, ask them what they think about it not being a good place to put their spare money..:rotfl: :rotfl: :rotfl:

MTC

ariba10

Alan50 wrote:

I have 13K in premium bonds, and have invested a small amount over the last 20 years. I do win from time to time £50 and £100 which certainly brightens my day. (normal return 1.5-2%/year)
Martin is correct with his article, but may I add from my study point of veiw
(nerdy) that you can check the large winning numbers on the https://www.nsandi.co.uk web site (so long as you have a PB No.) and as of the last 4 years (48 draws) all winners of the £1M. prize have had £20-£30K in Premium Bonds...
Good Luck
Alan

About twelve months ago a woman holding about nine pounds in bonds won the one million pound prize.