NS&I increase Premium Bond prize fund...

gt94sss2

baby_boomer wrote: »

On the wider issue, if NSI kept increasing their tax free rates along with the bank of England then the banks and building societies would soon moan about unfair competition, and rightly IMHO. It's not the Treasury's job to set the leading rates in a free market. It's there to raise money for taxpayers as cheaply as possible.

NS&I traditionally raise/decrease the interest rate on Premium Bonds by the change in the base rate - and banks/building societies expect that and don't complain.

As such, its disappointing for the full base rate increase not to be passed on this time and they have effectively decided to increase their margins instead.

On the rest of their products, their rates generally reflect the amount of money they need to raise or the size of the budget deficit.

Regards
Sunil

twowheelspete

heckmondwike06 wrote: »

I have held £100 worth of premium bonds, however, I was thinking of investing around £70,000 in bonds, what are my chances of winning a prize (even a tenner)? Is it worth it over 11 months as I am looking to settle my mortgage or should I seek some alternative savings (please point me in right direction).

Many thanks

:money:

well, erm, there's a max holding of 30k per person. And the minimum prize size is £50.

as discussed at length on this and other forums, people with premium bonds usually fall into the following categories
i. higher rate tax payers who can put the full £30k in, it being tax efficient.
ii. people who aren't higher rate payers but just want a bit of excitement at the possibility of winning a big prize and accept the possibility that they won't win anything
iii. people who believe they are lucky/have god on their side etc. See category iv.
iv. poor deluded fools (like my sister, who point blank refuses to listen to reason) who put their savings in there and just see sizable sums turn to dust in our economy of accelerating inflation.

I bought premium bonds 10 years ago when I was young and stupid with money from my newspaper round/mowing people's lawn/working on farm etc. Never won anything and never expect to. Wish I hadn't bothered.

baby_boomer

gt94sss2 wrote: »

NS&I traditionally raise/decrease the interest rate on Premium Bonds by the change in the base rate - and banks/building societies expect that and don't complain.

Is that what NSI did when base rates went up to 15% in 1989? Or in the 1970s when tax rates were much higher and interest rates surged?