Premium bonds

redpete

Pagala said:

I suppose I just fall into the trap of overestimating people. People just don't understand inflation or investments.

Or maybe overestimating your understanding of what people might need from their savings & investments. If someone is relying on savings / investments for a significant part of their income, e.g. a pensioner. What happens if there is a stockmarket crash that means they now need to get that income from selling equities at a low value; a wise mitigation is to keep money in a crash-proof savings (such as PB) so you can afford to leave the equities until they recover their value.

Or maybe they've sold a property and need to keep the money somewhere that is guaranteed to not lose value before they need it to buy the next property in 3 months, 6 months, a year. Would you trust it to an equity-based investment?

It's a straightforward risk/security vs reward judgement.

eskbanker

IanManc said:

eskbanker said:

 It's obviously not a universal panacea applicable to everyone, ........

*Tautology Pedant Alert*

When is a panacea not  "universal" Eskie?  😉

It's a fair cop, it's something of an overused cliché.... 😃

Pagala

I can't say what I really think, otherwise I'll get banned. I poked fun at premium bonds, and got a warning. Yet here in this thread I've directly been called an idiot. I've got my own opinions on that one. I've never bought a premium bond.

Bravepants

Pagala said:

I can't say what I really think, otherwise I'll get banned. I poked fun at premium bonds, and got a warning. Yet here in this thread I've directly been called an idiot. I've got my own opinions on that one. I've never bought a premium bond.

Oh, I think you've made yourself perfectly clear.

kuratowski

Inflation or no inflation, you need to have at least some cash (the fabled "emergency fund").  For myself, premium bonds are attractive because of the tax-free prizes.  This makes the 0.90% expected prize rate (for sufficiently large amounts) attractive in comparison to other easy access options.  A cash ISA might work, but I have preferred to use my ISA allowances for investments.

P1Fanatic

ranciduk said:

Apart from all the ups and downs you could mention- it’s actually a bit of fun checking the results once they are released 

i still get a buzz when I find out I’ve won £25

Do you use the app with the congratulations in slow mo as you wait for the prize value to appear? I have mine and both my parents accounts in the app so get 3 lots of excitement each month. I always wonder if you win the £1m if the app tells you or asks you to call them asap 

lozzy1965

Pagala said:

Premium bonds have crossed my radar recently. I just looked into them, and I must be misunderstanding them. I can't think of a worse thing to do with your money. Could someone help me to understand this?

Apparently, you buy a premium bond and they (NS&I) give you a premium bond number. Every month, there is a prize draw. Out of all the countless premium bond numbers in existence, you stand a chance to win £25. The odds are absolutely mental: something like 1 in 34000+, according to a website I found. Meanwhile, year-on-year your invested sum grows at a rate well, well below the rate of inflation. Something like 1%.

Am I reading this correctly, or have I misunderstood something fundamental about premium bonds? It's quite possible I'm an idiot and I don't get it. Why would anyone buy premium bonds? Are they just a means of preying on the vulnerable and non-neurotypicals?

It's as simple as the fact that on average the prizes won will be a little under 1% and for a safe place to put up to £50K, where your capital is not at any risk and you can access your money quickly you can't better that.  So if that is your requirement for such a sum of money then your reason to choose Premium Bonds is as simple as that.

So it might appear that you didn't understand this?

Thrugelmir

Pagala said:

I can't say what I really think, otherwise I'll get banned.

Why bother to post at all then. If have no intention to debate in a constructive and adult manner. Not least respecting that other people may hold different views to yourself. Other social media sites are available where you'll find plenty of immature ill informed discussion. 

redpete

Pagala said:

I can't say what I really think, otherwise I'll get banned. I poked fun at premium bonds, and got a warning. Yet here in this thread I've directly been called an idiot. I've got my own opinions on that one. I've never bought a premium bond.

Your 'poking fun' included comments that those who use PBs "just don't understand inflation or investments" or "they are ... well, not allowed to say" and that there's not "a worse thing to do with your money".

Then you get offended because someone poked fun at you by agreeing with your comment "maybe I'm an idiot"!

EssexHebridean

Thrugelmir said:

Pagala said:

I can't say what I really think, otherwise I'll get banned.

Why bother to post at all then. If have no intention to debate in a constructive and adult manner. Not least respecting that other people may hold different views to yourself. Other social media sites are available where you'll find plenty of immature ill informed discussion. 

Casting an eye over the OP's posting history sheds a fair bit of light on the reason for the thread. I notice they also returned later to suggest that they were "poking fun" - something which they made no efforts to suggest in Post 1. Hopefully the fact that they have been called out on this one might mean they move on elsewhere - an internet forum of this type is not really the right place to stroke a superiority complex, IMO. 

@redpete - completely agree - the irony!