Premium Bonds Article Discussion Area

[Deleted User]

the pb pot has been slashed in half today
http://www.citywire.co.uk/personal/-/news/money-property-and-tax/content.aspx?ID=333263&re=4953&ea=3040

Midnight_Cowboy_2

The press release is here:

http://www.nsandi.com/press-room/press-releases/pr2004424.jsp

Not good news for PB holders, I think. The odds of any bond winning are still 1 in 36,000, but the prize fund has been reallocated as follows:

Previous

---

Now
Prize fund rate
1.80%

---

1%
Higher value prizes (£5,000 +)
4% of prize fund -- 6% of prize fund
Medium value (£500 +)
1% of prize fund --- 5% of prize fund
Lower value (£50 +)
95% of prize fund - 89% of prize fund


Haven't done the stats yet, but first impressions are better chance of mid size price than previously, but at the expense of small regular prizes. One of the million pound prizes has been given up for the introduction of £25 prizes; good news for holders of small numbers of bonds. NSI says this is to increase the numbers of winners, but the number of winning bonds has only increased by about 1.5% (1.092m vs 1.075m).

The press release says that if you hold £30000 of bonds, you can expect, on average, 10 prizes per year. With the payout at 1%, it's not yet clear what the realistic (small) prize pot is, it won't be possible to calc until they publish the number of prizes at each level. However, if the number of 'medium' prizes is realistic, that would mean 94% is returned as regular prizes, so for a holder of £30000, expecting ten prizes a year, that would be £282 a year.

Premium Bonds aren't looking very good value to me now. I've already reduced my holding such that it was quite similar to that of th National Lottery (in terms of cost of lost interest, and odds of winning a large prize). When all the figures are available, I will recalculate the odds and consider again what is the optimum holding (if any).

*By 'realistic', I mean a reasonable chance of winning; for example, under the previous rules, with a £30000 holding you could on average expect to win £50 once every 1.2 months, and £100 once every 3 or so years - quite realistic. However, the next prize (£500) could only be expected once every 154 years - not so realistic!

NPowerUser

Nice for one of this months winners just announced.

Prize Won £1000 Bond Number 2DL840802 Total Bond Holding £1 Area Cumbria Purchased Jan-68
Never give up on the lost interest. :beer:

mrgingles

My grandmother bought me £10 worth of premium bonds when i was born in 1981, is there any point in me holding on to this, i havent checked if ive won anything as everywhere i look it say you need a minimum of £100?

Paul_Herring

everywhere i look it say you need a minimum of £100?

That's for new subscriptions. Your £10 is still being entered.

Midnight_Cowboy_2

mrgingles wrote: »

My grandmother bought me £10 worth of premium bonds when i was born in 1981, is there any point in me holding on to this, i havent checked if ive won anything as everywhere i look it say you need a minimum of £100?

You can hold onto them but the odds of winning with such a tiny amount are minute. Personally I'd cash them in and go and enjoy myself with the tenner! You can check if you've won on the NS&I website.

Kif_inti

martink9 wrote: »

I have the same dilemma - £29,992:rotfl: :rotfl:

If your holdings are just below the maximum allowed;
Tick the reinvest winnings box,
next time you have a win they will top up your holding to £30,000 and send a cheque for the balance

That's how I got to hold the full £30K

Milarky

Midnight_Cowboy wrote: »

You can hold onto them but the odds of winning with such a tiny amount are minute. Personally I'd cash them in and go and enjoy myself with the tenner! You can check if you've won on the NS&I website.

Is it possible to cash in '£9' and keep a single '£1'? That would be be my recommendation

Midnight_Cowboy_2

Milarky wrote: »

Is it possible to cash in '£9' and keep a single '£1'? That would be be my recommendation

Do you seriously think it's worth keeping £1 worth of bonds? Probably not unless you plan to live for a few million years or so!

baby_boomer

kittie wrote: »

the pb pot has been slashed in half today

I can understand why financial illiterates like Bob Geldof & Germaine Greer would advertise them.

So why is Alan Sugar recommending them when no businessman worth his salt would ever invest in such a dire product?

Or is it money for old rope for this ex-businessman?