premium bonds is it worth it?

millspriory

My Dad has what was the maximum £30,000 investment in premium bonds and has done for a few years since they raised the maximum he has found that he hasn't been winning anything each month and he is getting fed up and doesn't know whether to leave the money in or take it out and put it elsewhere. He is 66 so doesn't want to tie it up for too long and recommendation?
Thanks

steelbru

If he wants a guaranteed return on his £30k he should take it out and invest in savings accounts.

If he likes the very small chance of winning really big he should leave it

If he's up for a bit of risk of potentially losing some, but at he same time potentially gaining some he could look at stocks and shares

Depends what he's looking for - but thinking of premium bonds as a regular income generator is a very poor idea as so much of the overall prize fund goes to the big prizes that you have almost no chance of winning

jimjames

What other income, savings or investments does he have?

Age 66 he could have 20+ years of income requirements ahead

alanq

With average luck on £30,000 he would win £350 a year. Not a large sum but with over 1% interest tax free, easy access and as low a risk as one can get, Premium Bonds should not be immediately dismissed. It all depends what he would do with the money if it wasn't in Premium Bonds. Easy access savings would give a predictable return but a very small one.
www.moneysavingexpert.com/savings/premium-bonds-calculator

Stubod

..thought the max was £40k now?..and due to rise to 50 next year?..

are they worth it?...yes if you win a million, no if you don't get at least 1.3%, all down to statistics....on average you will "win" less than the published 1.3 odd % due to the higher payouts......

...if I had no other savings I probably would not bother with PB's as a first option, but if they are part of a wider package then why not?....you may get lucky...but the chances are you won't..

alanq

Stubod wrote: »

..thought the max was £40k now?...

millspriory wrote: »

My Dad has what was the maximum £30,000 investment in premium bonds...

Stubod wrote: »

....and due to rise to 50 next year?..

The £50,000 maximum was announced for some time in 2015-2016. The next tax year maybe?
http://nsandi-corporate.com/chancellor-announces-plans-for-nsi-in-2014-budget/

PlymouthMaid

I think he has been a little unlucky as my parents have the £30 grand each and seem to win every month at least once. I would keep them.

nilrem_2

Has your dad taken out the new 65+ pensioner bonds? they offer a very good return at ATM and might be an alternative to the P bonds.
However it's a tricky one to answer, probability shows that you have little chance of winning a decent prize but every month some one does and you have to be in it to win it.

I have have the amount your father does and generally win a few £25 prizes every year however last year we won a £1000 prize so you can get lucky!

talexuser

I've had 5k punt money in since late '98 and won £1100 over those 16 years. Used to get small prizes every now and then pretty regularly, not had a prize in well over 2 years now. Beginning to think it is not really worth it, except in that you get your gamble money back (less inflation). But the best you might get on that 5k, after tax, is a little over 50 quid a year, if all your high interest bank accounts are full. Think about cashing in every now and then, but never get around to it since not desperate for the cash. But the paltry prize rate is dis-spiriting.

gadgetmind

millspriory wrote: »

He is 66 so doesn't want to tie it up for too long

Why? Does he have plans for this money or does he need it to generate him an income for the next 20-30 years?

millspriory

He has a pension and savings he uses his maximum ISA allowance every year. He isn't badly off really but he gets very annoyed when no winnings come through each month so is thinking about investing it in somethingelse, he is careful and doesn't like risk.