Poor return on Premium Bonds

Sailtheworld

My grandmother bought £1000 of premium bonds for my two kids when they were born (20 odd years ago). One prize between them (£50) in that time. 22 years at the average saving rate since then of 3.5% and they'd have £2000 each today.

Per the post above premium bonds are for people who want to join a club where you give your money to another member on a random basis. It's like the lottery but you lose your money over decades rather than the first Saturday draw.

polymaff

Sailtheworld said:

My grandmother bought £1000 of premium bonds for my two kids when they were born (20 odd years ago). One prize between them (£50) in that time. 22 years at the average saving rate since then of 3.5% and they'd have £2000 each today.

Not as you've stated it, pal !

Sailtheworld

polymaff said:

Sailtheworld said:

My grandmother bought £1000 of premium bonds for my two kids when they were born (20 odd years ago). One prize between them (£50) in that time. 22 years at the average saving rate since then of 3.5% and they'd have £2000 each today.

Not as you've stated it, pal !

£1000 each. £1000 x 3.5% for c20 years  = £2000?

polymaff

Sailtheworld said:

polymaff said:

Sailtheworld said:

My grandmother bought £1000 of premium bonds for [each of] my two kids when they were born (20 odd years ago). One prize between them (£50) in that time. 22 years at the average saving rate since then of 3.5% and they'd have £2000 each today.

Not as you've stated it, pal !

£1000 each. £1000 x 3.5% for c20 years  = £2000?

With the added "each", yes.

BTW, over the 22 years the RPI is 1.80, so the ~£2k is, RPI-wise, only 10% up in terms of value... :'(

RyanHello

Premium bonds are only a bit of fun. Much better than going on the lottery 

eskbanker

polymaff said:
BTW, over the 22 years the RPI is 1.80, so the ~£2k is, RPI-wise, only 10% up in terms of value... :'(

Not much real-terms growth, it's true, but still significantly better than having lost 40-45% of the value with the capital tied up in PBs!

polymaff

eskbanker said:

polymaff said:
BTW, over the 22 years the RPI is 1.80, so the ~£2k is, RPI-wise, only 10% up in terms of value... :'(

Not much real-terms growth, it's true, but still significantly better than having lost 40-45% of the value with the capital tied up in PBs!

Oh, obviously so. I was just giving the poster the chance to notice his inconsistency - which he did - before taking up the second paragraph.

Whenever MSE discusses Premium Bonds, the posts become so dogmatic / extreme, e.g.

" ... premium bonds are for people who want to join a club where you give your money to another member on a random basis."

Premium Bonds make sense for some and not for others. The issues are easily understood.

EDIT: Here's the real issue - how do you make this B awful new MSE software single-space paragraphs which show as single-spaced in Preview but as double-spaced when posted - as above?

eskbanker

polymaff said:

Whenever MSE discusses Premium Bonds, the posts become so dogmatic / extreme, e.g.

" ... premium bonds are for people who want to join a club where you give your money to another member on a random basis."

Premium Bonds make sense for some and not for others. The issues are easily understood.

Trouble is, the issues are easily misunderstood too - more than one thread has been bogged down in attritional attempts to pigeonhole them into one of the conventional categories, when the truth is that they don't have any particularly convenient label, but yes, the concept is simple!

Sailtheworld

polymaff said:

Sailtheworld said:

polymaff said:

Sailtheworld said:

My grandmother bought £1000 of premium bonds for [each of] my two kids when they were born (20 odd years ago). One prize between them (£50) in that time. 22 years at the average saving rate since then of 3.5% and they'd have £2000 each today.

Not as you've stated it, pal !

£1000 each. £1000 x 3.5% for c20 years  = £2000?

With the added "each", yes.

BTW, over the 22 years the RPI is 1.80, so the ~£2k is, RPI-wise, only 10% up in terms of value... :'(

Sorry it wasn't clear - lol

ColdIron

polymaff said:

EDIT: Here's the real issue - how do you make this B awful new MSE software single-space paragraphs which show as single-spaced in Preview but as double-spaced when posted - as above?

Try Shift Enter