Premium Bonds: Are they worth it? Discussion Area

kenshaz

islandman wrote:

When I became 21, I invested in four £1 bonds. I am now almost 67 and in that time not one of those four bonds have brought me a penny. That bond with its value of £4 and its four numbers, now is brown with age. Dare I ask the question "what should I do with it?" frame it ?

Yes frame it, because just think about the pleasure it has given you ,the sheer anticipation.:j

StreamFarm

awayday wrote:

Remember also that your bonds are not even entered into the draw for at least the first month so that's losing you even more interest and so the calculations should be ammended for that.

... If you want to be in it I'd advise putting in the minimum of a hundred quid and withdraw and reinvest it at least annually.

You might then have a chance of winning something !! :rolleyes:

Otherwise stick to safer investments which offer a competitive return!

So you realise that the 1st (and possibly 2nd) month no investment takes place - yet you advise to withdraw annually. That way you only get a chance to win 10 or 11 times every year rather than every draw year after year if you keep the same bonds.
Is it me?

tinkerbell212

By investing in premium bonds at least I'm not touching the money in case the big one falls!! If I had put it in a savings account I would have felt a lot less guilty about taking the money out, now I really reconsider wether I need it badly enough..

And by the way, I have seen some £5 investments win £5000 (not mine, but have won some 100 and 50's). Seems like a good return.

webwiz

kenshaz wrote:

The point that you are making is that they are suitable for the rich and gamblers

Rich is a relative term. I am sure that you would seem rich to millions of people in the third world. Higher rate taxpayers include headmasters, doctors, senior nurses and policemen, many tradesmen such as plumbers etc.

Life is a gamble so we are all gamblers.

penniesmakepounds_2

Gorgeous_George wrote:

Those who think their investment has done well because they have won £50,000 or whatever should really be saying that their gamble has paid off. Just like lottery winners can boast that their investments in the Lotto has paid off.

In truth, the vast majority of the investors in premium bonds are losers. The very few that win are lucky gamblers.




GG

I know what your saying is right but at least i have SOME chance of winning big by playing with premium bonds and the national lottery. If I didn't play I would have NO CHANCE! Its the only vice I have and thats even on a small scale.:A

clearvisor

Milarky wrote:

The 'nerdy' stuff at the bottom is exactly the kind of caveat that National Savings fail to give. (Well done whoever got that included!)

The basic conclusion would have to be that anyone should only hold the smallest possible 'stake' to be in the draw each month. That's £100 presently. If you win any prize at all (during your lifetime!) that will have turned in a 'profit' for you. But I'd just stick at that and put no more money in (personally I have £1 my Gran bought for me in 1966)

The more that people talk about PBs and examine them the more likely it is that NS&I will 'tweak' them to make the odds 'fairer'. They have done this following recent falls (and rises) in the interest rate - the distribution in 1997 for instance was something like 98% of prizes (£50 and £100) made up only 75% by value of the fund. Last time I looked this was '90 percent' by value but - lo and behold - they have tweaked this ratio yet again and it is now 87% by value. In general the further it falls below 100% the greater the reduction in effective rate talked about.

Milarky, I also had two one pound bonds brought by my mother-in-law in the
1960's when they first came out,never won anything as yet,lol. fat chance I think,

violetta

Blue_splat wrote:

I was made redundant a couple of years ago and invested £15k in PBs. I won £50 a few times, but then the frequency dropped off. I remember a friend telling me that this happens with PBs. Even though ERNIE is supposed to be random, the draw seems to favour newer bonds. He had invested a similar amount and observed a similar pattern to me. He then cashed them in and bought a new £15k worth and lo and behold he enjoyed a few months of £50 and it tailed off again.

Anyone else notice this or am I a statistical anomaly?

My friend noticed this with hers. She said for the first year to eighteen months, you could almost know what the date was by the winning envelope/s arriving spot on time every month then suddenly - zilch! This continued, so she cashed them in.

webwiz

dazzles wrote:

I held a block of £20k (then maximum holding) from july2002 until july 2005,my total return for 3years was £1250 about 2.1% per year. Chances of winning the bigger prizes are slim very slim.Nowadays I am happy to receive a prize of £55-£60 every month ...without fail...no luck needed..from a savings account...it feels so much better and my cash is growing nicely.Everyone needs to face the truth...you ain' gonna win the jackpot!!

When you held the bonds you probably, very probably, were not going to win a million. Now you don't hold them you certainly won't!

Andy_Davies

ashm1 wrote:

Surely this is just a government tool to get cheap credit. Am I missing something ?

Yep, as is the rest of National Savings...

mummikins

I've had £1000 in premium bonds for 8 years and have lost count of how many wins I've had of £100 and £50;far more than I could have hoped for in interest and I still have my original £1000 to claim back whenever I want.I just wish I could invest a lot more.