NS&I Transparency

71peyman71

I am not sure if this issue has been addressed here in the past so apologies in advance.

I was wondering about the premium bonds monthly draw and that other than list of winning bonds, no other information is published. For example, what time is the draw on the day, how are the winning bond numbers generated and who oversees it? Is the draw recorded live somewhere? 

There seems to be a lack transparency and we are just expected to accept whatever comes out. 

Am I wrong or just expecting too much?

OldScientist

Some information at...
https://www.nsandi.com/get-to-know-us/about-premium-bonds
and
https://www.nsandi.com/get-to-know-us/monthly-prize-allocation

I guess that watching a computer generate 3-4m prizes in 12 minutes would be both dull and incomprehensible...

If you're asking, "are NS&I systematically dishonest in the draw?" I have no idea, but I would expect not (they do have their accounts audited).

jon81uk

The winning numbers are selected by Ernie (electronic random number indicating equipment).
The current version is Ernie 5 and more can be found out here Premium bond Ernie takes quantum leap into fifth generation | Savings | The Guardian

The draw happens on the first working day of each month and is announced on the second working day.

I thought the existence of Ernie has been common knowledge for 60+ years.

MX5huggy

It’s not a lottery, it’s a draw like a raffle but with 80 billion tickets and 4.8 million prizes. it would be dull tv. 

eskbanker

71peyman71 said:

I am not sure if this issue has been addressed here in the past so apologies in advance.

I was wondering about the premium bonds monthly draw and that other than list of winning bonds, no other information is published. For example, what time is the draw on the day, how are the winning bond numbers generated and who oversees it? Is the draw recorded live somewhere? 

There seems to be a lack transparency and we are just expected to accept whatever comes out. 

Am I wrong or just expecting too much?

Yes, the issue (at least the underlying issue of the integrity of the draw) has been addressed here in the past, in response to unfounded suspicions:

https://forums.moneysavingexpert.com/discussion/comment/78331104#Comment_78331104

Beyond validating the randomness of every set of drawn numbers, it's difficult to know what else can realistically be done, not least because the process is significantly more complex (and much less visual) than a lottery draw.

Having said that, I'm not sure of exactly how it works but know that the high value prizes are published ahead of the rest (which doesn't necessarily signify that they're drawn ahead of the rest) and that NS&I cling to the Agent Million process of physically sending a rep to visit the lucky £1m winners, which obviously has to happen before those numbers are published.

Likewise, there's a later mopping up process of reallocating prizes 'won' by invalid bonds, e.g. where they'd been sold late on or the owner had passed away, etc, so it is definitely a multi-phase activity....

RG2015

I hope you're not suggesting that a UK Government agency may be fiddling the figures.

71peyman71

Thanks all.
Of course I knew about Ernie but the whole process seems to lack transparency. I don't know what I expect to see and certainly showing the draw on TV is not feasible.

I have done pretty well out of it overall but the bit about the top prize winner is still a mystery.

coyrls

71peyman71 said:

Thanks all.
Of course I knew about Ernie but the whole process seems to lack transparency. I don't know what I expect to see and certainly showing the draw on TV is not feasible.

I have done pretty well out of it overall but the bit about the top prize winner is still a mystery.

Is this enough detail for you: https://www.theregister.com/2019/03/01/ernie_quantum_el_reg/

71peyman71

coyrls said:

71peyman71 said:

Thanks all.
Of course I knew about Ernie but the whole process seems to lack transparency. I don't know what I expect to see and certainly showing the draw on TV is not feasible.

I have done pretty well out of it overall but the bit about the top prize winner is still a mystery.

Is this enough detail for you: https://www.theregister.com/2019/03/01/ernie_quantum_el_reg/

Yes, thanks

I have had my fair share of wins, specially recently. Certainly a better return than if I had my money in an ISA or the best return savings account.

What seems a little unfair to me is that all bonds have equal chance of winning regardless of how long they are held. For example, someone who bought £50 bonds last month has as much chance to win a million as someone who's had the same amount for 10 years. 

Surely they can insert an algorithm where longer held bonds are more likely to win than newer bonds. They can do this by  weighing each bond based on length of time held, just for the million £ prizes.  

jon81uk

71peyman71 said:

coyrls said:

71peyman71 said:

Thanks all.
Of course I knew about Ernie but the whole process seems to lack transparency. I don't know what I expect to see and certainly showing the draw on TV is not feasible.

I have done pretty well out of it overall but the bit about the top prize winner is still a mystery.

Is this enough detail for you: https://www.theregister.com/2019/03/01/ernie_quantum_el_reg/

Yes, thanks

I have had my fair share of wins, specially recently. Certainly a better return than if I had my money in an ISA or the best return savings account.

What seems a little unfair to me is that all bonds have equal chance of winning regardless of how long they are held. For example, someone who bought £50 bonds last month has as much chance to win a million as someone who's had the same amount for 10 years. 

Surely they can insert an algorithm where longer held bonds are more likely to win than newer bonds. They can do this by  weighing each bond based on length of time held, just for the million £ prizes.  

Why should someone holding them for longer get better odds? The draws are monthly, if you remove the money you don't get entered into the draw.

71peyman71

jon81uk said:

71peyman71 said:

coyrls said:

71peyman71 said:

Thanks all.
Of course I knew about Ernie but the whole process seems to lack transparency. I don't know what I expect to see and certainly showing the draw on TV is not feasible.

I have done pretty well out of it overall but the bit about the top prize winner is still a mystery.

Is this enough detail for you: https://www.theregister.com/2019/03/01/ernie_quantum_el_reg/

Yes, thanks

I have had my fair share of wins, specially recently. Certainly a better return than if I had my money in an ISA or the best return savings account.

What seems a little unfair to me is that all bonds have equal chance of winning regardless of how long they are held. For example, someone who bought £50 bonds last month has as much chance to win a million as someone who's had the same amount for 10 years. 

Surely they can insert an algorithm where longer held bonds are more likely to win than newer bonds. They can do this by  weighing each bond based on length of time held, just for the million £ prizes.  

Why should someone holding them for longer get better odds? The draws are monthly, if you remove the money you don't get entered into the draw.

I am not talking about removing the money at all. 

I said it seems fairer for someone who's had their money in longer to have a better chance of winning than someone who invested just last month. It's an incentive to keep your money in longer.