In shock I just recieved £23,500.00 In Premuim Bonds

inshock1092

Thanks everyone this is really helpful!
I am going to use my own funds to give my parents a new bathroom and take my grandparents to see London eye.

I have been looking though the prizes for this year and to my shock it was only 1 £25.00 prize from January till now (April) so a fairly poor return. My isa is already filled . I am a student so have 10k tax free nearly.
Should I invest in new bonds as some of these are from 1986? Thanks.

atush

No, the bond numbers all have an equal chance.

suelees1

inshock1092 wrote: »

Shall I tell my parent to change the password on the account?

yes yes and yes again if you can't resist temptation

FatherAbraham

xylophone wrote: »

I wouldn't normally suggest cash based savings with deposit rates so low ...

Really?

One shoudn't let short-term returns affect one's asset-allocation strategy.

If one needs to have some assets as bank deposits, then even if that means an expected negative real return in the short term, one should nevertheless put those assets into bank desposits.

Only if one doesn't need cashlikeness at all should one avoid bank deposits. The general level of interest rates should have nothing to do with it.

Warmest regards,
FA

xylophone

I was looking at the particular situation of the OP- it appeared that he did not have a need for the money for some years and with low deposit rates (were he a taxpayer they might truly be considered dire) and the fact that CPI inflation is at 2.8% and RPI at 3.3%, his purchasing power would be diminishing quite rapidly.
In such a situation, using some form of stocks and shares based investment might have been worth considering.
However, he might wish to buy a house by his mid twenties and might need to access savings at an unsuitable time in the market, and he admits to being impulsive with money and something of a gambler - in these circumstances using term fixed rate isa and term BS bonds seemed the way to go - personal opinion only, as ever.

JoeCrystal

inshock1092 wrote: »

I am a student so have 10k tax free nearly.

The fact you are a student have no bearing at on the requirement to pay taxes. You still get a personal allowance which is why people tend to think they do not pay taxes since the earnings can be so low. Nevertheless, if you earn enough income from jobs, then yes, you do pay taxes.

Cheers,
Joe

padington

First things first, sort your gambling out. That could lose everything you and your parents have worked for if you don't watch it. Never bet when the house is guaranteed better odds ( no bookies and casino ) and go to gamblers anonymous as soon as you realise you can't heed your own set of boundaries.

More you gamble, more you re-wire your brain towards needing risks in your life and more you will chase your loses. It's worse than crack for some.

If you're going to gamble buy bit coins or gold or shares in broke lads or ill William's not a colourful and animated equation that over time is always a bum deal.

bigadaj

JoeCrystal wrote: »

The fact you are a student have no bearing at on the requirement to pay taxes. You still get a personal allowance which is why people tend to think they do not pay taxes since the earnings can be so low. Nevertheless, if you earn enough income from jobs, then yes, you do pay taxes.

Cheers,
Joe

I think the OP was making the point that the tax allowance is available so tax free investment gs aren't necessarily of benefit which is true. However as is always said whilst tax benefits can be useful it shouldn't be the primary reason for choosing a particular saving or investment product.

getmore4less

Even though ISA may not have a benifit as a non tax payer if you ever are going to be one building up the stash can pay i nthe future especialy if you will be a 40% taxpayer.

As for the premium bonds,

make sure prizes are reinvested

then consider your investment stratagy and if you want to move any of the money.

I have had them as my emergency fund, they are near instant acess and look after themselves now with a printout every time you win.

when you do decide order the refund in advance for just after a draw, and the money will be ready in a few days having maybe snagged a prize.

Jonbvn

Glen_Clark wrote: »

Why would you exclude the chance of getting £1m, any more than the chance of winning the lottery jackpot?
I think you are making this so complicated you are losing sight of the basics.
The fact is, at the end of a year, £100 in premium bonds will pay an AVERAGE of £101.50.
Wheras £100 on the lottery will pay an AVERAGE of £50.
So to suggest the lottery is a better bet than premium bonds is a no-brainer.

It is not a reasonable comparison. What you have to compare is the following.

1. Invest in premium bonds.
2. Invest in an ISA or other savings vehicle and spend the interest on lottery tickets.

With both methods the capital remains intact.

Overall, the 2nd option is usually better because the interest rate is higher than pb's and the chance of winning on the lottery is better than pb's.

No such a no brainer is it?;)