MSE News: Premium Bond chances of winning cut – are they really worth it?

Former_MSE_Helen

"NS&I is cutting the annual 'interest rate' on its Premium Bond prize fund from 1 August..."

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Premium Bond chances of winning cut – are they really worth it?



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Ectophile

I was thinking of buying some more Premium Bonds. I don't think I'll bother now.

To make it worse, they are drastically cutting the number of larger prizes to keep up the numbers of smaller ones. http://uk.finance.yahoo.com/news/ns-cuts-premium-bond-prize-101532804.html

fiesta04

It is also a bit naughty, as you would have needed to purchased PB's by June 30th to be entered for August Draw believing the odds of 24000/1. When they are now 26000/1. A bit underhand to say the least.

F4

torbrex

The more people that pull out the better the odds should be for those that keep hold of their PB's so although the number of prizes have been cut, with fewer people holding them, the odds of winning should stay about the same.

2010

Saving rates are rubbish and you don`t get your money back with the lottery, so yes PB are still worth having.

Naf

torbrex wrote: »

The more people that pull out the better the odds should be for those that keep hold of their PB's so although the number of prizes have been cut, with fewer people holding them, the odds of winning should stay about the same.

But fewer people holding them means (ultimately) the number and/or value of prizes goes down again. The status quo never changes, just like a casino.

Mr_K

fiesta04 wrote: »

It is also a bit naughty, as you would have needed to purchased PB's by June 30th to be entered for August Draw believing the odds of 24000/1. When they are now 26000/1. A bit underhand to say the least.

F4

Have to agree, they should have given at least a months notice so that those not happy with the new rate can withdraw. Savers really are being treated like something the Govt. have scraped off their boots. Shame on NSI.

ALIBOBSY

I only own a £100 bond from about 10 years ago, but have won £25 about 8 years in lol. Not worth the hassle to cash in and I look at it as an ongoing "lottery ticket" that may just strike very lucky one year.

However even at the lower rates I can see for some its still worth it. My parents both have maxed out isas and various other pensions/investments buildt up over the years they worked. They bought substantial premium bonds in the past as well as inheriting some from each of their parents. Since they retired they haven't bought any more, but have reinvested any small wins. My Dad was an engineer and loves his spreadsheets lol. He can show that on their amounts invested that the small wins they get are at least what they would get after tax in a savings account most years-occasionally slightly more, occasionally slightly less and there is the chance of a bigger win-they had a 1k last year which paid for a holiday. BUT I do think my Dad is quite a lucky person anyway.

So I guess I would say even before the drop in rates PB shouldn't be anyone's first port of call for investing, but still can be a part of a collection of investments.

I do agree though that the change in rates should have had more warning, at least in line with the delay that it takes to get a bond into the draw.

Ali x

torbrex

Naf wrote: »

But fewer people holding them means (ultimately) the number and/or value of prizes goes down again. The status quo never changes, just like a casino.

True but at least PB's have the advantage over the lottery of getting your money back and the prizes are guaranteed in as much as someone has to win them every month (no rollover)

Naf

torbrex wrote: »

True but at least PB's have the advantage over the lottery of getting your money back and the prizes are guaranteed in as much as someone has to win them every month (no rollover)

I thought that was a given lol.
The lottery is a fool's game; you're more likely to drop dead while waiting for the results than you are of actually winning.

theFirstCasualty

Martin keeps going on about how bad premium bonds are and this week he appealed to real savers etc but ...real inflation is running at about 8% (see american treasury web site and same true here) so save at 1.7% and lose 6.3% or use an isa and lose at 4.3% ...this is George Osbournes policy , he s paying off the national debt by depleting savers money through inflation (shhhh ) so you might aswell take the gamble and probably get 1.5% and maybe get a win ; just saving you are dead certain to be losing money . Sorry Martin, it's that basic maths stuff you keep going on about ... (I have an above average number of legs! shd have been my pen name)