Premium Bonds Article Discussion Area

SleeplessinScandinavia

On the subject of Premium Savings Bonds, I’ve just learnt that from 1 April this year you will no longer be able to buy them, in cash, over Post Office counters

You’ll still be able to buy Premium Bonds at a Post Office counter, but from 1 April you’ll need to pay by cheque or debit card. You can also buy Premium Bonds direct from NS&I – either online at nsandi.com or by phone on 0500 500 000.

Also from 1 April, Premium Bond brochures, forms and reply envelopes will no longer be on display at Post Office branches - you need to ask at the counter if you want a copy of a Premium Bonds brochure, prize draw leaflet or cashing in form (or you call their phone number andt hey’ll send you any brochures or forms you need.

quacker1964

I'm thinking about purchasing £3k worth of PB's and was wondering how holdings/numbers are checked?

Are they checked automatically or who you have to check (and claim) yourself?

From what I can gather, just from reading, I wouldn't, for example, have 3000 individual bonds to check (imagine!) but have a sort of certificate number which records all my holdings. If I was to add to them I get a new number. Does that sound about right?

As I say I know the pros and cons so not about that. Just wanted to know the practicalities.

Quack.

innovate

quacker1964 wrote: »

Are they checked automatically or who you have to check (and claim) yourself?

Yes they are checked automatically. If you are due any money, they will notify you, but you can also spend hours going through the published monthly winner lists yourself.

merlingrey

I've got a psychological aversion to winning against high odds (like the lottery) because if i won i'd be worrying about what other highly unlikely events would happen to me.

Like the odds of getting killed in a plane crash is 400,000:1

and normally you're like "that can't happen to me" but if i won the lottery at 14 million :1 i'd be worrying constantly.

Beige

I was just having a look at premium bonds and did a bit of financial analysis so I thought I would share it.

I used the moneysavingexpert prize calculator here based to get the 1 month payoff probabilities

I then calculated the expected growth rate of your investment. The current premium bond 'interest' rate of 1.5%, combined with the very uneven payout rates, translates into an average annual growth rate of just 0.165% (assuming you re-invest prizes).

I had considered them for my own investments because they are tax free, but having worked out the growth rate, I won't be buying them.

Of course, if you want to stand a chance of winning a million you might still want them (and they are better value than using a 1.5% NS&I account and spending each months interest on a lottery ticket).

brewerdave

Marty13 wrote: »

I was just having a look at premium bonds and did a bit of financial analysis so I thought I would share it.

I used the moneysavingexpert prize calculator here based to get the 1 month payoff probabilities

I then calculated the expected growth rate of your investment. The current premium bond 'interest' rate of 1.5%, combined with the very uneven payout rates, translates into an average annual growth rate of just 0.165% (assuming you re-invest prizes).

..not sure where you get that result - over 13+ years my return has been ~ 2.5%pa with prizes reinvested ...and over the past 2 years with the low prize rate of return (1.5%) I'm getting almost exactly 1.5% pa:)

Beige

brewerdave wrote: »

..not sure where you get that result - over 13+ years my return has been ~ 2.5%pa with prizes reinvested ...and over the past 2 years with the low prize rate of return (1.5%) I'm getting almost exactly 1.5% pa:)

yeah... my post is erroneous .... it's true if you buy 1 bond only (and assumes you can then re-invest in smaller parts of bonds).

atush

innovate wrote: »

When the Lottery was first thought of, the Virgin/IBM consortium tabled a bid on a non-profit basis. The CEOs of both those companies were - publically - extremely bullish about their chances - basically said the business was theirs because the "not-for-profit" proposition was the deal-clencher.

Well, as we know, they lost to Camelot. I don't know the reasons, but clearly, the not-for-profit element didn't count for much.

It is, of course, impossible to say for certain whether the public would have got better value from the not-for-profit bid than they got from Camelot. On balance, there is probably little between a not-for-profit deal, and a normal for-profit one. They'd just be accounting for things in a different way, and would probably have vastly different costs. A for-profit outfit would constantly squeeze their costs, whilst a not-for-profit one could just sit there fat and happy with run-away costs.

Possibly true, but i be the ticket cost would have remained the same?

innovate

atush wrote: »

Possibly true, but i be the ticket cost would have remained the same?

Doubt the ticket price would have remained the same. The costs would have risen at least in line with inflation, so they would have had to reduce the winnings, which would have resulted in public disappointment/dismay.

We shall never know, anyway.

atush

More public dismay when all those who can afford 1-2 quid a week, can't afford the increase?

Premium binds have remained at one quid?