Should I buy premium bonds? (No, seriously)

thrifty_pete

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?

Am I right in thinking once you earn over £16,850 you don't get the starting rate for savings?

ColdIron

thrifty_pete wrote: »

Am I right in thinking once you earn over £16,850 you don't get the starting rate for savings?

Broadly yes although your personal tax coding can influence the exact threshold. Remember also that income (pension, salary etc) above your personal allowance will reduce the amount of the £5,000 available to you for savings

linni

I put £5000 in PB's for my sons and have won absolutely nothing in 26 years! Maybe we are just unlucky..

My maths has deserted me for the moment but I think the probability of winning a prize with a £100 holding is once in every 250 draws - or once every 20 years. With £1000 held expect a prize every 2 years, £2000 held, expect a prize every year.

eskbanker

linni wrote: »

I put £5000 in PB's for my sons and have won absolutely nothing in 26 years! Maybe we are just unlucky..

That's extraordinarily bad luck!

With a £5K holding, it's only an 8.64% probability of not winning anything in a single year.

So, for two years that would be 8.64% of 8.64%, i.e. about 0.75%.

At five years, you're one in 207,972, but I doubt many calculators have the number of digits available to work it out over 26 years!

polymaff

linni wrote: »

I put £5000 in PB's for my sons and have won absolutely nothing in 26 years! Maybe we are just unlucky..

https://www.nsandi.com/do-i-have-any-unclaimed-prizes

?

jamesperrett

linni wrote: »

I put £5000 in PB's for my sons and have won absolutely nothing in 26 years! Maybe we are just unlucky..

Given that the equivalent interest rate for prizes was something like 5% when you invested that appears amazingly bad luck. I'd suggest that you check they have your correct details.

Terry_Towelling

linni wrote: »

I put £5000 in PB's for my sons and have won absolutely nothing in 26 years! Maybe we are just unlucky..

I don't believe you - it is too unlucky for words. Either (as suggested by others) your prizes lie unclaimed due to incorrect details being held, or they have gone 'astray'.

However, yours may just be a shining example of the difference between 'chance' and probability'. Some people think they are the same - they aren't.

There is a chance that you could win nothing ever regardless of how many bonds you hold. There is a chance you could win the top prize with only a £1 holding. There is a chance you could win 50,000 prizes in a month with a £50K holding. The probability (or expectation, if you like) of those events is, however, very, very small.

What surprises me more is that you just left them there all this time. 26 years in even a simple savings account would have seen growth - through the years of double-digit interest rates too. If rates averaged only 2% pa over 26 years the sum would have grown to about £8.3K.

Don't know how old your sons were at the time of purchase but they are presumably running their own lives now and may have received winnings without telling you. Do they still live at the registered address with you? Have you moved during the 26 years?