2X£1,000,000 Pulling out of Premium Bonds

N1AK

Sunbeam25 wrote: »

The number of £1m prizes is about to double without an increase is the prize fund. This means there will be a lot fewer small prizes. I'm about to sell most of my bonds (apart from the three £1 ones my mum bought me in 1960 'cos I'm a softie!!) Is anyone else thinking of doing the same, or are you thinking of investing more now that you can, and hoping the prize fund is increased?

It sounds like a pretty reasonable change to me. Premium bonds aren't the best choice for the vast majority of people looking for safe returns on savings. 50% of holders end up achieving the equivalent of .85% pa in interest.

So the market is really for customers who have already filled up better cash saving options (who will still have nowhere better left to go after this) and people who want to dabble with the chance of "winning big" with their savings. For that second group a doubling of the chance of winning the jackpot will likely be attractive.

bryanb

Caprylate wrote: »

The odds of winning a prize still remains the same at 26,000:1. The additional million pound prize is funded by the increase in the cap from £30,000 to £40,000.

How does that work? All those extra £10,000s are more chances to win, so surely less chance for me?

Fella

No because the more money invested in PBs the more prizes are given out. The odds of an individual bond winning are 26,000/1 regardless of how many you own & how many anyone else owns.

sorcerer

I use PB's as holding area for money I don't want to be taxed, my ISA is full. I can hold the max for another 2-3 years, then I will begin to move the money into my ISA's. So I have never thought PBs as investments like their website suggests. It's likely within 5 or 6 years my holdings will be down to 0. Meanwhile I live in hope I might win that million :beer:


The only way I would move them is if interest rates raise to at least 2.5% before tax, in easy access accounts, but since these are currently running around 1.3% I don't think they will be moved for a while

rockiedog

Another £25 for me, the 3rd win in 8 months, so £75 on £1500 :)invested is how much interest please?

ColdIron

rockiedog wrote: »

Another £25 for me, the 3rd win in 8 months, so £75 on £1500 :)invested is how much interest please?

Considerably higher than the average. The PB calculator predicts that on £1,500 you would win £25 over 2 years so it wouldn't be unreasonable to expect no more wins in the next 5 years as the odds revert to mean

www.moneysavingexpert.com/savings/premium-bonds-calculator

brewerdave

Interesting thread -I'd already come to the conclusion that the 2*£1 million prizes was going to be bad news for the "average" punter- I'm actively considering surrendering enuf of our PBs to fund our £15k S & S ISAs fully for this tax year next month- then the balance would be surrendered next year to allow for a further subs. to ISAs. Only stumbling block is that "her indoors" wants to keep them -in her simple world 2*£1 million = twice the chances!!:rotfl:

pat_cashmoney

Except the odds haven't changed just because they won 3 times in 8 months. They are still likely to win £25 over the next 2 years.

Sunbeam25

I've decided to pull out, I would have preferred more smaller prizes. I'll buy a lottery ticket every now and again and continue to dream!

Perelandra

Structured products is the way to go.

Create your own with savings accounts and lottery tickets.

Article in the Telegraph yesterday promoting these things... at least Martin was a voice of sanity:

http://www.telegraph.co.uk/finance/personalfinance/savings/10873124/Earn-520-a-year-from-Premium-Bonds.html