Premium bonds.

moneyman22

Premium bonds. Is it true that the more people buy bonds the less chance you have of winning?

or does it not matter since its random.

in the middle of arguement with someone

mm

qpop

The "odds" convert into an interest rate of 1.5%, so the expected "winnings" are £1.50 per £100 invested (tax free).

So, no, the odds are fixed regardless of how many people "invest"

moneyman22

if erni happens to pick a number that no one has got yet, it then has to select another. Does this not increase the chance of winning if, in theroy it has to keep picking a number until it finds a holder?


extreme example,,, if there were only 500 people holding bonds in the whole of the uk, would it have to keep churning and picking numbers until the top prize landed on one that was taken?

Lokolo

No I don't think it works like that.

e.g. 10 holdings; 001, 002, 003, 004, 005, 006, 007, 008, 009, 010

There are 4 holdings 001, 004, 005, 008

I don't think the other holdings (002, 003, 006..etc.) are ever in the draw. The draw only includes active holdings. So infact the first ID chosen will always have a holder.

moneyman22

Lokolo wrote: »

No I don't think it works like that.

e.g. 10 holdings; 001, 002, 003, 004, 005, 006, 007, 008, 009, 010

There are 4 holdings 001, 004, 005, 008

I don't think the other holdings (002, 003, 006..etc.) are ever in the draw. The draw only includes active holdings. So infact the first ID chosen will always have a holder.

i read on the site that it sometimes generates number for a bond not yet bought.


If it only only picks from "active holdings" then the fewer people who have bonds the greater your chance of winning for sure!

VT82

It depends about if you are talking about the odds of winning any prize, or the odds of winning the jackpot.

If more people buy bonds, it generates more prizes to keep the overall return (currently 1.5% of the total holdings per year) the same. The end result is to keep the odds of winning the same.

On the other hand, if more people buy bonds, there is less chance of any one bond winning the 'big' prize, until such a time as they increase to having two of the 'big' prize. Although they are just as likely to increase the size of the big prize, or the size of the lesser prizes, to keep the overall return the same, rather than increasing the number of jackpots on offer per draw.

The odds of winning a prize will also change when the 1.5% changes, which they are at liberty to do to increase or decrease demand as they see fit.

Your argument really sounds like a moot point to be honest.

getmore4less

The return is fixed currently at 24,000 to 1.

It did go to 36,000 to one for a while.

thats the chances of winning 1 prize with a £1 bond.

AIUI a bond can only win one prize in any one draw.

The number of holders or the number of bonds does not change those odds for each £1 bond

an old article
http://www.guardian.co.uk/money/2006/nov/01/bonds.saving