premium bonds is it worth it?

Paul_1977

I have 12k and have won £100 in the last six months, I could make more in Santander 123 for example but I leave it in there for the chance of getting a higher prize.

It depends on how you see premium bonds, at a lottery or a savings account.

jimjames

millspriory wrote: »

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.

Does he understand risk?

Has he got any investments at all or is everything in cash? He may think it is risky to invest in funds or shares but long term it is more risky to have all your money in cash as it won't keep up with inflation.

There is no need to go for an all or nothing option, you can split amounts into different pots. Investments may rise and fall but if it's income you're after then there are many investments that have increased their income payments for over 40 years. Maybe do some investments and buy some lottery tickets if he wants the buzz of winning.

masonic

Paul_1977 wrote: »

I have 12k and have won £100 in the last six months, I could make more in Santander 123 for example but I leave it in there for the chance of getting a higher prize.

Speaking of which, perhaps the OP's father could stick £20k in a Santander 123 account and every month take out 50% of the interest and use it to buy lottery tickets. Guaranteed payments every month and he will still be "in it to win it". He could of course adjust that percentage up, or down in order to strike the right balance between sensible saving and thrills.

nilrem_2

masonic wrote: »

Speaking of which, perhaps the OP's father could stick £20k in a Santander 123 account and every month take out 50% of the interest and use it to buy lottery tickets. Guaranteed payments every month and he will still be "in it to win it". He could of course adjust that percentage up, or down in order to strike the right balance between sensible saving and thrills.

Personally I prefer having my money in PB's rather than the lottery because I feel that at least my money may help towards the NHS etc rather than the lottery where Camelot creams off profit and does not necessarily give money to causes that I would support.

It's only my personal view others will think quite differently, I changed my opinions on the lottery when the contract was given back to Camelot with little chance of any one else ever being given the chance to run it.

ColdIron

There may just about be a case for PBs if he was a higher rate taxpayer but less so if only paying basic rate and hardly any case if his income is less than the personal allowance

kidmugsy

If he were to win a million, would most of that money end up paying 40% inheritance tax? If so, that takes the gilt off the gingerbread.

masonic

nilrem wrote: »

Personally I prefer having my money in PB's rather than the lottery because I feel that at least my money may help towards the NHS etc rather than the lottery where Camelot creams off profit and does not necessarily give money to causes that I would support.

It's only my personal view others will think quite differently, I changed my opinions on the lottery when the contract was given back to Camelot with little chance of any one else ever being given the chance to run it.

Sounds very noble, but it must be offset to some extent by the fact your money is helping exacerbate wealth inequality through the payout of huge prizes to the lucky few. If one is motivated by philanthropy, a conventional interest bearing account, with some of that interest donated to charity, would seem a better option.

nilrem_2

masonic wrote: »

Sounds very noble, but it must be offset to some extent by the fact your money is helping exacerbate wealth inequality through the payout of huge prizes to the lucky few. If one is motivated by philanthropy, a conventional interest bearing account, with some of that interest donated to charity, would seem a better option.

It's just my view I don't expect anyone else to agree with it. I stopped giving money to Camelot when the contract was re-given to them unfairly after Virgin offered to run it but were not given a fair chance.
At the time the reason given was that they already had the infrastructure in place to run it in which case it is pointless for anyone else to bother bidding for the contract when it becomes available again.

Paul_1977

nilrem wrote: »

Personally I prefer having my money in PB's rather than the lottery because I feel that at least my money may help towards the NHS etc rather than the lottery where Camelot creams off profit and does not necessarily give money to causes that I would support.

It's only my personal view others will think quite differently, I changed my opinions on the lottery when the contract was given back to Camelot with little chance of any one else ever being given the chance to run it.

Im quite sure Camelot only takes 5% for profit (1%) and operating costs (4%).

https://www.national-lottery.co.uk/life-changing/where-the-money-goes

yeah they might spunk the money on some stupid things, but not as bad as foreign aid. (a good idea but lots of the money ends up being spend on private jets etc.)

alanq

Paul_1977 wrote: »

yeah they might spunk the money on some stupid things,...

Camelot collects the money it does not choose how the money raised is spent. Any "stupid things" are chosen by bodies appointed by the Government. Replacing Camelot would not change the causes supported.

"The National Lottery Distribution Fund (NLDF) was established in 1994 at the time the National Lottery was launched, to receive and hold monies generated by the National Lottery for good causes. Section 21 of the National Lottery etc Act 1993 places the Fund under the control and management of he Secretary of State for Culture, Media and Sport."
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/243904/National_lottery.pdf