ITV Martin Lewis - Premium Bonds

MoneySaverLog

Dear Mr Martin Lewis,

No I like having some Premium Bonds, always a good chance of winning a £1,000,000 and getting my money back if I needed to.

Contrast that with The lottery and you can end up losing your stake too.

mania112

I also think there's a time/place for Premium Bonds.

Why did Martin Lewis suggest not to bother?

talexuser

a good chance... 1 in 44 billion is not my idea of a "good" chance.

atush

Having 100 is a fun idea. Having 30K is barmy.

I am with Martin.

dunstonh

MoneySaverLog wrote: »

Dear Mr Marin Lewis,

No I like having some Premium Bonds, always a good chance of winning a £1,000,000 and getting my money back if I needed to.


Contrast that with The lottery and you can end up losing your stake too.

Put money in savings account and use the interest to purchase lottery tickets and you have your own premium bonds. That is how the two are normally compared. I dont know how Martin compared them but would expect it to be something like that. Being ITV, he probably had to dumb it down somewhat.

If you have premium bonds then you are saying you are the sort of person who would be happy drawing your monthly/annual interest to spend on lottery tickets.

snowcat53

His main point was that getting interest was generally better, and made strong play that most people get nothing (including a maths lesson on mean and median), but he was less anti for higher rate tax payers (assuming ISA'd out).

dunstonh

snowcat53 wrote: »

His main point was that getting interest was generally better, and made strong play that most people get nothing (including a maths lesson on mean and median), but he was less anti for higher rate tax payers (assuming ISA'd out).

It is a very fair point. Far too many people with relatively small amounts use Premium Bonds when they would be far more suited to using savings accounts.

adonis

dunstonh wrote: »

It is a very fair point. Far too many people with relatively small amounts use Premium Bonds when they would be far more suited to using savings accounts.

I must admit when I see the monthly results on teletext it's nice to see someone with only a couple of hundred pounds worth of Premium Bonds win a decent amount, I like to think it could make a difference to them.

theGrinch

regular income beats whats nothing more than a bet

Totton

Though he did suggest that they were fair bet for higher rate tax payers.

alanq

Totton wrote: »

Though he did suggest that they were fair bet for higher rate tax payers.

As he did in the weekly newsletter a couple of weeks ago.
"10. Rates so awful, Premium Bonds now a decent bet for high-rate taxpayers. I've never been a fan, & even had the Premium Bond Win Predictor Calc built to show why. The current prize rate is a poor 1.5%. But it's tax-free, so for once, right now, 40% taxpayers with typical luck stand a decent chance of beating top easy access savings. Yet it's still pants for smaller amounts/lower taxpayers. See Premium Bonds: Are They Worth It?"

http://www.moneysavingexpert.com/tips/14-11-2012/

I wonder how long this situation will last. I can't be long before the interest rate used to generate the prize fund falls yet again.