Premium Bonds Article Discussion Area

The_Bleurk

Quite right miaxmia - I have the 30k and it is not unusual to have runs of three months or so with no wins. Over the 41 months I have held the maximum though I average £62 a month. The last 12 months has been my best ever averaging £116 a month or 4.6% - equivalent to 7.8% for a higher rate taxpayer....

I expect my next 12 months won't be so good - but you never know

Aegis

miaxmia wrote: »

You cannot quote on an individual month - tell us about what your friend one the month before or the month before that or even over the past year!

Chance of that happening for any one person with the full holding is 24%. The chance of winning more than £200 would be 11.5%, with the median probability falling into the £100 category. Even taking into account the taxation on the high interest account the interest account is better value than Premium Bonds.

No surprise if you think about it though, as they only give 3.8% effective interest per person, and that interest has to fund the larger prizes that most people have a low probability of ever actually seeing themselves.

All in all, my opinion of this product is still very much akin to how I see the Lottery, only with somewhat better odds of at least winning something. On the other hand, the chances of winning big are significantly higher if you play the Lottery with the interest you'd earn on a high-interest savings account than if you just put your capital in Premium Bonds.

miaxmia

The_Bleurk wrote: »

Quite right miaxmia - I have the 30k and it is not unusual to have runs of three months or so with no wins. Over the 41 months I have held the maximum though I average £62 a month. The last 12 months has been my best ever averaging £116 a month or 4.6% - equivalent to 7.8% for a higher rate taxpayer....

I expect my next 12 months won't be so good - but you never know

Great The Bleurk - nice to see a bit of positive thinking. I have £3000 worth and over the past year my winnings have netted me 8.4% tax free - my husband has the maximum and his winnings have netted him 4.85% tax free. Added together our joint winnings have netted us 5.15% tax free. I am satisfied with my return for the little bit of anticipation that I might be a bigger winner one day - that's why millions of people waste money week in week out on the national lottery - for the anticipation of something good coming of it.

euro19

I'm a fan of this site since I discovered it. I can't remember how. And what caught my attention was the Premium Bonds Calculator. Since I'm one of many British that I have Premium Bonds I was impressed by how accurate this calculator is. I've recently found a website www.mypremiumbonds.co.uk which is full of articles and related information for anyone wanting to know more about Premium Bonds.

Aegis

euro19 wrote: »

I'm a fan of this site since I discovered it. I can't remember how. And what caught my attention was the Premium Bonds Calculator. Since I'm one of many British that I have Premium Bonds I was impressed by how accurate this calculator is. I've recently found a website www.mypremiumbonds.co.uk which is full of articles and related information for anyone wanting to know more about Premium Bonds.

Not sure that's a great resource, given that it seems to be of the opinion that Premium Bonds are some sort of super-investment, while in actual fact they are way below par for the vast majority of bond holders.

Statements like this:

If you win a cash prize, it is free of taxes. So when you win those million pounds, you get to keep the whole million. You can reinvest and at the same time live the quality of life you always dreamed of. Even if you one the minimal prize of fifty pounds, you would have made more money on your investment than you would have if you put it in a savings account at the bank.

are just outright false. At 4% net return in a savings account you'd "win" £100 every month, meaning that you'd need 2 prizes per month just to keep level with a 5% gross savings account as a basic rate taxpayer. Not exactly great given that the chance of winning twice in one month even with the full holding is lower than 50%.

Over 1 year you have a little over 50% chance of breaking the £1000 mark with the full holding, while you have a 100% chance of getting £1200 with the 5% account from earlier. If you managed to get a higher interest rate than 5% (all too easy at the moment), then Premium bonds start having much lower chances of beating your bank account, with less than 10% of full-amount holders in any one year getting more than £1500 out of their Bonds.

Phaelok

Well I would love to know what I am doing wrong. £2100 invested since last Feb and not even 1 prize =( and yet for some reason I still continue to buy more bonds every month. Maybe, just maybe, I will be lucky next month although I wont hold my breath...

Aegis

It's the hope of winning big that keeps people pumping money into gambling too...

It's not a nice way to keep people buying your product, but it works.

Still, Premium Bonds are better than some forms of gambling!

The_Bleurk

Nothing wrong Phaelok - £2100 will get you approx one win a year - and it will likely be £50 but not necessarily.

seven-day-weekend

We have £3000 worth of PBs between us and we won five times in 2007 - two £100s and three £50s IIRC!

I do know they are not a serious investment, this is money which we judged we could afford to lose the interest on and maybe win a decent amount.

We don't do any sort of lottery, for us this is a little gamble where we don't lose all our stake money.

The_Bleurk

THats a result 7

3000 would normall give you a win every 8 months