Should I buy premium bonds? (No, seriously)

ColdIron

With the personal allowance (£11,850), the starting rate for savings (£5,000) and the personal savings allowance (£1,000) maybe 95% of people wouldn't pay tax anyway, have you done the sums and concluded that you would?

martinthebandit

Masomnia wrote: »

I'll let you know what I do with the £1,000,000.

Oi! Don't you go winning my £1 000 000!

Masomnia

ColdIron wrote: »

With the personal allowance (£11,850), the starting rate for savings (£5,000) and the personal savings allowance (£1,000) maybe 95% of people wouldn't pay tax anyway, have you done the sums and concluded that you would?

Even taking into account the personal savings allowance, yes.

I realise I'm very fortunate.

Masomnia

martinthebandit wrote: »

Oi! Don't you go winning my £1 000 000!

There are two million pound prizes every month so I've no doubt we'll both win

martinthebandit

Masomnia wrote: »

There are two million pound prizes every month so I've no doubt we'll both win

Well I was hoping that both me and the good lady would win, although maybe that's a little greedy :cool:

davemorton

Sorry guys, one of those has my name on it. (Although you can win Septembers draw, as I wont be entered into that one )

talexuser

Let's say you have all the paying bank accounts, and the regular savers, and a good pot of cash in the highest interest easy access account. You max out your s&s isa every year, max out your pension, and still have enough over for a bunch of unbundled funds/investment trusts/etfs. You're not interested in fixed term cash since think it would be better off in funds, and you have enough short term cash. You're not interested in the relative risk of P2P or venture capital trusts. In that case I see no reason not to have a bundle in premium bonds for the punt if capital is still left over.

bowlhead99

Masomnia wrote: »

From reading the MSE guide, if you have the top amount invested in PBs then chances are you will make the headline rate, so I'm comfortable enough with that. I'll have a think.

Not sure where you're getting that from - it's more likely you won't make the headline rate.

In order to 'expect' to get the headline rate, you must win all the prizes including the top one which only comes around somewhat infrequently (once in tens of thousands of years if you hold the max 50,000 of bonds).

They're more useful to a 40-45%+ taxpayer who's already used up the personal savings allowance and would otherwise have to earn a large gross rate in traditional savings to get an equivalent to the median win rate.


For other people, they might be useful if for example you need to have a large amount of cash sitting around for a house purchase or tax bill in less than a year's time, don't want to split across multiple bank accounts, and don't need to absolutely maximise your rate, and fancy a bit of a flutter with the interest earned.

polymaff

Masomnia wrote: »

From reading the MSE guide, if you have the top amount invested in PBs then chances are you will make the headline rate, so I'm comfortable enough with that. I'll have a think.

Oh, that is just absolute nonsense. In those circumstances you should expect to achieve close to 90% of the headline rate. See my previous posts on this matter for the reasoning and / or look at the returns other full holders declare.

JohnRo

I held 20K PB's for two months and didn't win a damned thing, total ripoff!!!