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Premium Bonds Article Discussion Area

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  • Kallisti
    Kallisti Posts: 43 Forumite
    eskbanker wrote: »
    No, I did the odds in another thread recently, based on the NS&I published prize draw breakdown, and 1.2% is the expected return in £25 prizes, rising slowly closer towards the full 1.4% as the larger prizes are added in:

    #1 - admit when you're wrong. I got the wrong headline figure - I calculate the odds as being 1.2% immediately, 1.22% over 2 years, 1.26 over 4, 1.3 over 17 and 1.33 over a lifetime... Probably using the same method as you refer to (though I didn't look back to find it!).
    eskbanker wrote: »
    tax can and does make a significant difference for some, tipping the balance back towards PBs in those circumstances....

    So, absolute return is one benefit of PBs and, personally, long-shot of a second home on an island somewhere is another. Ignoring the first, the second suddenly doesn't seem too much different. At worst (£50k over 5 years & a 1.35% rate), you're talking about £500 + £175 in the lottery which will probably be zero and a 1/45m chance of an island retreat (though to be fair, maybe the whole island) or put the lot in PB and get £500 + 1/35m chance of second home. Very much marginal and PB is less hassle/complexity.
    :: No Links in signatures please - FM ::
  • KenSim
    KenSim Posts: 11 Forumite
    Third Anniversary
    Well its been a while since my post on premium bonds and I did say that it was a gamble without losing lots of money, I am well aware of the effect of inflation which you obviously thought that I hadn't been able to figure out for myself. Just thought I'd let you know that at the moment I am at just over 300% profit .Thats the beauty of a relatively low cost gamble. :j:j
  • eskbanker
    eskbanker Posts: 37,525 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    KenSim wrote: »
    Well its been a while since my post on premium bonds and I did say that it was a gamble without losing lots of money, I am well aware of the effect of inflation which you obviously thought that I hadn't been able to figure out for myself. Just thought I'd let you know that at the moment I am at just over 300% profit .Thats the beauty of a relatively low cost gamble. :j:j
    Looking back up the thread I see that it was me who observed that holding PBs loses value to inflation if you have average luck (in that the typical 1.2-1.26% return will usually be below inflation, even allowing for being tax-free).

    Obviously if you have significantly better than average luck then you can indeed outperform inflation but the fundamental point remains that if you believe that you can achieve 300% profit on an ongoing basis then you're in for some serious disappointment, so if the purpose of your post was simply a boastful "I told you so" then perhaps you'd be gracious enough to accept that there is a concept of beginner's luck.

    A £50 stake held for 6 months has a 1 in 34,790 chance of returning at least £150, which illustrates the likelihood of achieving 300% profit - you may have been the one at this stage but obviously the odds favour you being in the 34,789 in future!
  • 50k and no return again,first 24 months returns of over 2%,25 month nothing then £25,then£25 then nothing this equates to 0.3 % for first 3rd of 3rd year,suspicion is old bonds don't win,I'd heard that,I'm having my money back
  • robotrobo
    robotrobo Posts: 921 Forumite
    Part of the Furniture 500 Posts
    Pete_h wrote: »
    50k and no return again,first 24 months returns of over 2%,25 month nothing then £25,then£25 then nothing this equates to 0.3 % for first 3rd of 3rd year,suspicion is old bonds don't win,I'd heard that,I'm having my money back

    hard luck pete.
    we had 10 wins for december 2018:D
  • eskbanker
    eskbanker Posts: 37,525 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Pete_h wrote: »
    50k and no return again,first 24 months returns of over 2%,25 month nothing then £25,then£25 then nothing this equates to 0.3 % for first 3rd of 3rd year,suspicion is old bonds don't win,I'd heard that,I'm having my money back
    Suspicion is you're believing old wives' tales, as per the common myths debunked at https://www.nsandi.com/ernie:
    Myth: Only new Bonds win prizes
    Each £1 Bond has an equal chance of winning, regardless of when or where it was bought. Over 95% of eligible Bonds have been bought since the year 2000. So even though Premium Bonds have been on sale for over 60 years, this is why newer Bonds seem to win more frequently. When ERNIE randomly generates winners, he doesn’t store any numbers, so there’s no way any Bonds can be left out.

    Myth: Old Bonds are left out of the draw
    Winning numbers are generated randomly and then matched against eligible Bond numbers afterwards – numbers aren't entered into or stored in ERNIE so there's no way that any Bonds can be left out of the draw.
    Measuring results of a random draw over a period as short as four months is ridiculous, so if you're wanting predictability then PBs were never the right product for you in the first place!
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
    10,000 Posts Fifth Anniversary Name Dropper Photogenic
    Pete_h wrote: »
    50k and no return again,first 24 months returns of over 2%,25 month nothing then £25,then£25 then nothing this equates to 0.3 % for first 3rd of 3rd year,suspicion is old bonds don't win,I'd heard that,I'm having my money back


    How foolish. You invest in a lottery and then expect regular consistent returns, and when you get what you'd expect, randomness, you think its a fix !


    (and if you think old bonds dont win, yours are close to new, only three years old ) !
  • ennnceee
    ennnceee Posts: 31 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    Hello, I know this is a silly question, but...

    Is there any way of confirming that these have been entered in every draw since 1956, and are still included, would you know?

    Thanks!
    Filiss
  • Zanderman
    Zanderman Posts: 4,898 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    ennnceee wrote: »
    Hello, I know this is a silly question, but...

    Is there any way of confirming that these have been entered in every draw since 1956, and are still included, would you know?

    Thanks!

    If you have premium bonds they're in the draw. There's no other option!

    Every bond is always entered, that's the whole basis of the draw.

    If you're worried that you've not won anything and think that implies they weren't included you're being overly suspicious. They will be included but the chances of winning are, as always, small and random. Especially if you only have 13. Even since 1956.

    I have had 1 (one!) since the early 1960s and I've never won either.

    Mrs Z-man on the other hand has a few thousand and sometimes wins £25, occasionally £100, but her chances are much greater as she has so many.

    Edited to add: I assume you've checked online to make sure you haven't missed a win?
  • polymaff
    polymaff Posts: 3,954 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    edited 25 January 2019 at 1:50PM
    ennnceee wrote: »
    Is there any way of confirming that these [1.] have been entered in every draw since 1956, and [2.] are still included, would you know?

    1. I very much doubt it.

    2. You could check the Bond Record on the NS&I website - but that will only confirm that NS&I regard those bonds as yours.

    Practically, you just have to trust NS&I. Sure, NS&I have been caught bungling virtually every facet of their remit - but you'll need some clout to get a trustworthy external body to audit NS&I.

    I've tried. :(
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