Bad run on Premium Bonds

Criptine

Albermarle said:

Criptine said:

Albermarle said:

SVts said:

I've just invested 25k but after reading this thread I am regretting it already. My first eligible draw is June so I'll wait until then and see what happens. Think I'd be better off accepting the guaranteed £75 from Chip each month.

Not yet mentioned in this thread, but it is clear that any 100% rational 20% taxpayer  would not buy PB's .

However very few people are 100% rational, and some are hardly rational at all. PB's are popular because they appeal more to the emotional side. They are more fun than a savings account ( for some people). They wait expectantly for the draw each month; they share their winning news with friends and family; they hope for a big win , they even post on forums about them 

This! And having the chance to win £1M with Premium Bonds helps me resist the temptation of buying Lotto tickets, which I think we can all agree are a complete waste of money.

Do not want to disappoint you but the chance of winning a Million is almost non existent.
I think if you have the Full £50K , you would win  a Million something like once every 40,000 years, so you will have a long wait 
Maybe best to lower your sights to say a £5K prize !

The chances are just as infinitesimally small with Lotto, but at least I keep my stake money with Premium Bonds.

Millyonare

Albermarle said:

Millyonare said:

Albermarle said:

SVts said:

I've just invested 25k but after reading this thread I am regretting it already. My first eligible draw is June so I'll wait until then and see what happens. Think I'd be better off accepting the guaranteed £75 from Chip each month.

Not yet mentioned in this thread, but it is clear that any 100% rational 20% taxpayer  would not buy PB's .

However very few people are 100% rational, and some are hardly rational at all. PB's are popular because they appeal more to the emotional side. They are more fun than a savings account ( for some people). They wait expectantly for the draw each month; they share their winning news with friends and family; they hope for a big win , they even post on forums about them 

It was mentioned a couple of pages back.

Premium Bonds are a handy tool for 45% taxpayers, a maybe for 40% folks, and probably a no for 20% or 0% basic raters.

The marketing is very (very) clever. Sticking "premium" in the headline normalizes a gloss of high-end product for posh middle class people. Reinforcing that you "win" every month adds a neverending four-week loop of excitement, discouraging people from withdrawing. Posh, fun, sticky... A marketer's dream.

In reality, Premium Bonds don't offer premium rates for most (3.3% net), and most people with small stakes don't earn a bean most months. They are Average Bonds. Or Disappointing Bonds. Or Random Bonds.

In effect, PBs are a state-run gambling lottery, where the odds are heavily stacked against poor people. Very clever marketing!

Although using the word 'Premium' is not some recent marketing tool. They were called Premium Bonds when they were launched 67 years ago.

Yes, they were (are) marketing genius. A fantastic case study in how 3 words can transform a product.

They are "bonds", so sound safe. They are "premium", so sound posh. They give you an endless loop of "win", so always sound exciting.

They cloak the harsh reality that the return is a bit rubbish, most people are losers (not winners), and the odds are stacked heavily in favour of rich people who already have lots of cash.

Those early marketers were genius.

Swipe

Criptine said:

Albermarle said:

Criptine said:

Albermarle said:

SVts said:

I've just invested 25k but after reading this thread I am regretting it already. My first eligible draw is June so I'll wait until then and see what happens. Think I'd be better off accepting the guaranteed £75 from Chip each month.

Not yet mentioned in this thread, but it is clear that any 100% rational 20% taxpayer  would not buy PB's .

However very few people are 100% rational, and some are hardly rational at all. PB's are popular because they appeal more to the emotional side. They are more fun than a savings account ( for some people). They wait expectantly for the draw each month; they share their winning news with friends and family; they hope for a big win , they even post on forums about them 

This! And having the chance to win £1M with Premium Bonds helps me resist the temptation of buying Lotto tickets, which I think we can all agree are a complete waste of money.

Do not want to disappoint you but the chance of winning a Million is almost non existent.
I think if you have the Full £50K , you would win  a Million something like once every 40,000 years, so you will have a long wait 
Maybe best to lower your sights to say a £5K prize !

The chances are just as infinitesimally small with Lotto, but at least I keep my stake money with Premium Bonds.

No, the chance of winning £1M on PBs is way more remote than the National Lottery but, as you say, you get to keep your stake.

jaceyboy

Have you ever heard of someone saying they won the big one, £1m? no nor me, I dont think it happens

jimexbox

I pulled out of premium bonds a couple of years ago. I've spread my cash saving across various fixed rate bonds and instant access accounts. I can leverage the starting savings rate of my partner, which is very useful. 

RedImp_2

I had 2 blank months but in the 2 months since I’ve won a total of £1000.  

Neil49

I've got the maximum holding. Won £1,100 last month and £250 the previous month. 

Eco_Miser

Albermarle said:

Criptine said:

Albermarle said:

SVts said:

I've just invested 25k but after reading this thread I am regretting it already. My first eligible draw is June so I'll wait until then and see what happens. Think I'd be better off accepting the guaranteed £75 from Chip each month.

Not yet mentioned in this thread, but it is clear that any 100% rational 20% taxpayer  would not buy PB's .

However very few people are 100% rational, and some are hardly rational at all. PB's are popular because they appeal more to the emotional side. They are more fun than a savings account ( for some people). They wait expectantly for the draw each month; they share their winning news with friends and family; they hope for a big win , they even post on forums about them 

This! And having the chance to win £1M with Premium Bonds helps me resist the temptation of buying Lotto tickets, which I think we can all agree are a complete waste of money.

Do not want to disappoint you but the chance of winning a Million is almost non existent.
I think if you have the Full £50K , you would win  a Million something like once every 40,000 years, so you will have a long wait 
Maybe best to lower your sights to say a £5K prize !

And yet two people manage it every month! Sometimes on fairly small holdings too.

Yes, I know. Multiplying very small numbers (the probability) by very large numbers (the bonds in play) can result in normal sized numbers.

Albermarle

jaceyboy said:

Have you ever heard of someone saying they won the big one, £1m? no nor me, I dont think it happens

If two win a Million every month for 10 years.  That means that 240 people every 10 years out of a UK adult population of about 45,000,000. How likely is it that you would ever meet or know one of these people ? Especially as many will keep it quiet anyway.
In fact it would actually be a shock to beat these odds and actually know a Million pound winner.

Middle_of_the_Road

I have two £10 bonds bought in the 1960s. I've won two £50 prizes in all this time.
Last win was in the 90s IIRC. Have I been lucky, I think so.