When will NS&I increase premium bond prize fund rate?

jak22

eskbanker said:

jak22 said:

The odds of getting something over £25 is still pretty rare so its probably best just to assume - on average over a year - its more like a 2.1% tax free account - that's 3 or 4 £25 prizes a month on average with 50K - up from 2 a month 

No, 98% of prizes are currently £25 ones, but this changes hugely to only 70% of prizes being the bottom tier under the new model, so it's a significant change - the expected 'average luck' return should be in circa 2% territory, but a £50K holding should deliver about seven prizes above £25 in any given year, compared with less than one currently....

Maybe - but there's no difference between getting a £100 prize and 4 £25 prizes - and there's no such thing as luck - its a return of just over £1000 over a year on £50K however its paid out.

eskbanker

jak22 said:

eskbanker said:

jak22 said:

The odds of getting something over £25 is still pretty rare so its probably best just to assume - on average over a year - its more like a 2.1% tax free account - that's 3 or 4 £25 prizes a month on average with 50K - up from 2 a month 

No, 98% of prizes are currently £25 ones, but this changes hugely to only 70% of prizes being the bottom tier under the new model, so it's a significant change - the expected 'average luck' return should be in circa 2% territory, but a £50K holding should deliver about seven prizes above £25 in any given year, compared with less than one currently....

Maybe - but there's no difference between getting a £100 prize and 4 £25 prizes - and there's no such thing as luck - its a return of just over £1000 over a year on £50K however its paid out.

Of course a £100 prize is the same value as 4 £25 prizes, but I was correcting the assertion that the prize mix is similar.

Not sure what your point about luck is - when discussing the outcome of a random draw that gives hugely variable returns, the obvious shorthand is to use the concept of good/bad/average luck, but do you have a better term in mind?

S_uk

RG2015 said:

intalex said:

Is this effective next week’s draw or early November?

It is being shown as the current rate so that must be from the October draw.

I think they also announced the last increase (in May) at about the same time - just a few days before the following month's draw, to which the new prize rate applied.

jak22

eskbanker said:

jak22 said:

eskbanker said:

jak22 said:

The odds of getting something over £25 is still pretty rare so its probably best just to assume - on average over a year - its more like a 2.1% tax free account - that's 3 or 4 £25 prizes a month on average with 50K - up from 2 a month 

No, 98% of prizes are currently £25 ones, but this changes hugely to only 70% of prizes being the bottom tier under the new model, so it's a significant change - the expected 'average luck' return should be in circa 2% territory, but a £50K holding should deliver about seven prizes above £25 in any given year, compared with less than one currently....

Maybe - but there's no difference between getting a £100 prize and 4 £25 prizes - and there's no such thing as luck - its a return of just over £1000 over a year on £50K however its paid out.

Of course a £100 prize is the same value as 4 £25 prizes, but I was correcting the assertion that the prize mix is similar.

Not sure what your point about luck is - when discussing the outcome of a random draw that gives hugely variable returns, the obvious shorthand is to use the concept of good/bad/average luck, but do you have a better term in mind?

Ok yes my "assertion" was wrong as there are more small prizes just above £25  - well done - but to clarify - its the thought that you might win a large prize so you'd earn well above 2.2% in a year thats still not wise if youre trying to compare Premium Bonds to other savings accounts.

Luck suggests that that person will inherently attract more prizes whatever else happens. It's just as invalid as believing recent bond purchases win more often just because the higher volumes sold over recent years means prize results might more often show wins for more recent purchases.

refluxer

intalex said:

Which one is the October draw? The one in early October or early November?

Yes - the draw in early October, so only premium bonds held for the whole month of September will qualify.

eskbanker

jak22 said:

Ok yes my "assertion" was wrong as there are more small prizes just above £25  - well done - but to clarify - its the thought that you might win a large prize so you'd earn well above 2.2% in a year thats still not wise if youre trying to compare Premium Bonds to other savings accounts.

Sounds like a strawman to me - who was suggesting that?

jak22 said:

Luck suggests that that person will inherently attract more prizes whatever else happens.

That's not what's meant when referring to the concept of 'average luck' to depict a realistic expectation of a return on a PB holding, in that terms like 'median' aren't widely understood.

jak22 said:
It's just as invalid as believing recent bond purchases win more often just because the higher volumes sold over recent years means prize results might more often show wins for more recent purchases.

Yes, that myth of recent bond numbers coming up more often has been debunked many times, but that sort of superstition isn't relevant to the labelling of a median return as 'average luck'.

S_uk

I wonder if they'll announce another increase in the prize rate before Christmas? Maybe I'm being overly optimistic.

mlc2009

S_uk said:

I wonder if they'll announce another increase in the prize rate before Christmas? Maybe I'm being overly optimistic.

The interest rates may be nearing 3 to 4 percent then. It depends how many bond holders jump ship I think