Premium Bonds Article Discussion Area

RG2015

ranciduk said:

Is the next draw on a Saturday??

That’s what the NS&I prize checker app says. I will check it then but I cannot recall it being on Saturday before.

ellenvan

1st Of April is a Friday for the top prizes then all others on the Saturday I think

murphydavid

Decided; with interest rates going up for savings but not for premium bonds; if I should be moving my money. Was impressed by the effort put in to develop the premium bonds calculator - what would I win in a year.
Results
10,000 invested 0.75% (7500/10000)
15,000 invested 0.67% (10000/15000)
20,000 invested 0.875% (17500/20000)
Now the article says the more invested the greater the percentage.
Did I get something wrong?
If not; I'm no longer confident the calculator works?

polymaff

murphydavid said:

Was impressed by the effort put in to develop the premium bonds calculator ...
Results
10,000 invested 0.75% (7500/10000)
15,000 invested 0.67% (10000/15000)
20,000 invested 0.875% (17500/20000)
Now the article says the more invested the greater the percentage.  Did I get something wrong?
If not; I'm no longer confident the calculator works?

The shortcomings of the MSE premium bond fibulator are well-known.  It is a fact that bigger holdings give better returns, though.  Imagine a world where all coinage / notes were multiples of £25 to see why.

eskbanker

murphydavid said:

Decided; with interest rates going up for savings but not for premium bonds; if I should be moving my money. Was impressed by the effort put in to develop the premium bonds calculator - what would I win in a year.
Results
10,000 invested 0.75% (7500/10000)
15,000 invested 0.67% (10000/15000)
20,000 invested 0.875% (17500/20000)
Now the article says the more invested the greater the percentage.
Did I get something wrong?
If not; I'm no longer confident the calculator works?

As @polymaff says, the calculator is flawed, and in particular the way in which it uses an inflexible set of data points to calculate results, and clumsily summarises the outcome in its simplistic presentation of an expected outcome, so it's always worth digging into the 'full odds' tab for a more realistic assessment of the outcomes.

With £10K, there's a 68.4% chance of 0.75% and 47.8% chance of 1%, so they summarise this as 0.75% (as the lowest outcome with a >50% chance).

With £15K, there's a 77.4% chance of 0.67% and 45.2% chance of 1%, so they use 0.67%.  There is an interim outcome of 0.83% (£125) but they choose not to calculate the chances of this, which would be the most likely median.

With £20K, there's a 57.4% chance of 0.875% and 43.5% chance of 1%.

The most realistic way of working out the most likely 'average luck' return over a year is to multiply the holding by 0.9% and round down to the nearest £25, the effect of which becomes less pronounced the larger the size of the holding, but that definitely doesn't mean that "the more invested the greater the percentage", so, no, you didn't get something wrong, MSE did!

RG2015

Luck is random as is average luck.

My wife and I each have had £10k since 28/09/2020.

My wife's winning to date are £175 (1.1% p.a.) and mine are £100 (0.63% p.a.)

Therefore my wife is 75% more lucky than I am.

Then again they say luck evens out over time, and she has had to put up with me for over 3 decades.

mrsyardbroom

It's fun having Premium Bonds. I don't get much interest from my ISA and savings account, and none at all from my current account. I checked my winnings for the last year. I hold £3100 worth of bonds and I've won £175 within the last 12 months. In January I won £100, and it went towards my MOT. I've just bought some more bonds.

eskbanker

mrsyardbroom said:

It's fun having Premium Bonds. I don't get much interest from my ISA and savings account, and none at all from my current account.

It's not either/or - you can hold Premium Bonds while also making best use of your other money, so worth checking best buys for the other account types and upgrading/transferring to better ones....

shanew4874

What does today’s budget mean for PB holders? More, less or no change amount of prizes wise? Thanks 

eskbanker

shanew4874 said:

What does today’s budget mean for PB holders? More, less or no change amount of prizes wise? Thanks 

No change as a direct result of the budget - NS&I sets rates according to its performance against its Treasury-set annual net financing target, although inevitably there is some impact from the wider interest rate environment too, in terms of how NS&I products compete with what's going on elsewhere in the market.

The 2023/24 target is £7.5bn +/- £3bn, and today's forecast is slightly above the top of that at £10.9bn.

The 2024/25 target is £9bn +/- £4bn, so not significantly different....