Premium Bonds Article Discussion Area

shanew4874

Checked on the prize checker site and it states no wins this month, also checked bond account and no change in balance, when it states no wins on the prize checker site does that mean just for the smaller prizes or is that all prizes inc the bigger ones? Only ask as someone on here did state on here somewhere that they received confirmation of a large win a few days after the draw date

eskbanker

shanew4874 said:

Checked on the prize checker site and it states no wins this month, also checked bond account and no change in balance, when it states no wins on the prize checker site does that mean just for the smaller prizes or is that all prizes inc the bigger ones?

Any prizes you'd won in the main draw should be visible on the prize checker by now.

shanew4874 said:

Only ask as someone on here did state on here somewhere that they received confirmation of a large win a few days after the draw date

There is a later 'mop-up' exercise that reallocates a very small number of prizes initially awarded inadvertently to bonds that turn out to be invalid, but that's very much the exception rather than the rule, so if you haven't won any prizes according to what's visible now, then it's overwhelmingly likely that your next chance is the May draw....

shanew4874

eskbanker said:

shanew4874 said:

Checked on the prize checker site and it states no wins this month, also checked bond account and no change in balance, when it states no wins on the prize checker site does that mean just for the smaller prizes or is that all prizes inc the bigger ones?

Any prizes you'd won in the main draw should be visible on the prize checker by now.

shanew4874 said:

Only ask as someone on here did state on here somewhere that they received confirmation of a large win a few days after the draw date

There is a later 'mop-up' exercise that reallocates a very small number of prizes initially awarded inadvertently to bonds that turn out to be invalid, but that's very much the exception rather than the rule, so if you haven't won any prizes according to what's visible now, then it's overwhelmingly likely that your next chance is the May draw....

Ok, thanks for confirming.

10ants

ML seems to have a problem with PBs.   If you are putting in a small amount or are not a higher rate taxpayer then totally agree you should avoid them.  However, if you are a higher rate taxpayer with a lump sum invested, returns on PBs invariably beat bank deposits (certainly variable rate deposits, often also beating 1yr FRBs),  due to the returns being tax-free.
ML over complicates the analysis. 80% of the prize-fund is paid out in lower prizes (25,50,100), if you have 50k invested logically you ARE going to get 'average luck' over time, you ARE going to see an average of 80% of the prize fund as a return over time.
So right now 80% of 4.4% = 3.52% net.  For a 40% taxpayer, that is the same as getting 5.86% on a bank deposit (vs ~5.2% being the best 1yr FRB currently).

I have held PBs for ~15yrs and have tracked the returns.  On a 250k holding (i.e. across a family of 5) I have never failed, in any year, to get less than 80% of the average prize fund as a return.   You might well not achieve this year-on-year record with 50k invested, but over a longer time period, say 5yrs, I would expect you would also hit the average 80% of the %age prize-fund as a return. 

eskbanker

10ants said:

ML seems to have a problem with PBs.   If you are putting in a small amount or are not a higher rate taxpayer then totally agree you should avoid them.  However, if you are a higher rate taxpayer with a lump sum invested, returns on PBs invariably beat bank deposits (certainly variable rate deposits, often also beating 1yr FRBs),  due to the returns being tax-free.

To be fair, the article does make that clear, alongside a table comparing returns with savings accounts, according to tax rates:

So overall, the higher tax band you're in, and the more money you're saving in Premium Bonds, the better a bet they look for you.

MikemseForum

The £50k limit on individual Premium Bond holdings was set in 2015,  with purchaing power equivalent to £75k today.

I asked my MP whether there are any plans to restore the value of the maximum holding or index it.  The reply from the Treasury was negative.  One reason given is that "raising the limit can lead to the scheme becoming dominated by a small number of people with large investments.  NS&I has found from experience that customers are sensitive to taking part in a prixe draw in which some people hold a very large number of bonds.".

Interestingly the reply goes on to state that "NS&I is sensitive to changing the investment limit in a way that disadvantages other banks and firms that offer rates of interest with similar returns to Premium Bonds."  It seems that, by design, Premium Bonds will not compete with other banks.

masonic

MikemseForum said:

Interestingly the reply goes on to state that "NS&I is sensitive to changing the investment limit in a way that disadvantages other banks and firms that offer rates of interest with similar returns to Premium Bonds."  It seems that, by design, Premium Bonds will not compete with other banks.

That and NS&I has net financing targets and it will reduce the prize rate to balance larger inflows than it needs. Such as if those at the limit were able to increase their holdings.

LeafGreen

MikemseForum said:

The £50k limit on individual Premium Bond holdings was set in 2015,  with purchaing power equivalent to £75k today.

You could also say that in 2014 the limit was £30,000, which is equivalent to about £41,500 today, therefore the limit as it stands now is actually ahead of inflation.

Dizzycap

Premium Bond Prize funds reducing from 4.8% to 4.6% in August...........

NS&I announces Premium Bonds change affecting millions of savers

Swipe

Dizzycap said:

Premium Bond Prize funds reducing from 4.8% to 4.6% in August...........

NS&I announces Premium Bonds change affecting millions of savers

You mean 3.6%. I'd jump at 4.6%