Premium bonds - any point investing under £1000's

PixelPound

Just wondered if anyone has small amounts of premium bonds, or is it not worth it unless you put in £1000's?

I've read https://www.moneysavingexpert.com/savings/premium-bonds/ which seems to be that unless you put in £1000's you are likely to get zero, but then the article also starts with

Line up everyone with £1,000 worth of Premium Bonds in order of their year's winnings, and the person halfway along would have won... not a penny! In fact, you'd need to walk past 60% of the line until you hit the first £25 winner.

Surely every £1 bond has an equal (very low) chance? So is it worth putting in some spare money, I'm not on about vs savings - I have some EAS's and (building my emergency fund, it's past 6 months of bills now), but I do like a flutter on the Lottery (spend minimal under £20pm) and wondered if I'd be better going into PB now I've realised the minimum is £25. Sort of give me that "in it to win it" fix, but knowing I get my stake back. I know I get less than my stake back at present from any lottery wins, and some months I'll spend zero on lottery and use it for some other forms of entertainment

So those who have PB, how much percentage of your savings is it? Would not starting with £1000's invested be not worth doing?

I've read the various threads on here but that's often about comparing return rates to savings accounts, but not whether just putting small amounts is pointless. 

MX5huggy

If having £1000 of PB stops you spending £25 a month on the lottery then they would be good value. The win chance is 1/22000 (from August) so you could expect 1 win every 2 years. 

RobM99

I won £100 three weeks ago, I think I've got 4 bonds!

Albermarle

If you have a small amount, you are more likely to  not win anything, or win more than the average. The more bonds you have the more likely your return will be the average return .
So with £50K of bonds by far the most likely outcome over a year, is that you will get the average expected return. The less bonds you more likely you will get above or below the expected return.

Note though that the expected average return is less than the published prize rate, as the headline rate includes the very big prizes. The chance of winning one of those is so small you can effectively discount it. So the new headline rate of 4% really = a realistic expectation of around 3.5% ,or thereabouts.

quirkydeptless

I have just £25 in premium bonds

boingy

With Premium Bonds you are most likely to get zero prizes from a small investment even after years but, as you have established, you can have your money back. If it's a gambling thrill you are after it's not very high adrenaline!

The reality is that neither PB nor the lottery will make you a millionaire unless you are very, very lucky.

Brie

I put £1k in for both myself and the OH simply because I had that money available and no immediate plans.  I could have put it in a savings account paying diddly instead.  No wins yet but it's only been 6 months.

Gers

From this month's high value winners:

won £100,000

with only £500 invested in April 2007

GalacticaActual

An article this afternoon, which is based on the July 2023 prize draw:

The lucky dozen! How 12 Premium Bonds holders with pots of £1,000 or less scooped prizes between £10,000 and £100,000 in the latest draw

Prize value	Winning Bond number	Total value of holdings	Location	Date they purchased the winning Bond
£100,000	117HB416722	£300	East Sussex	Oct-06
£100,000	127MW685934	£500	Outer London	Apr-07
£100,000	102LW635263	£1,000	Leicester	Oct-05
£25,000	240AN945527	£500	Northern Ireland	Jan-15
£25,000	30SB521959	£205	Northern Ireland	Jun-92
£25,000	182NH718384	£913	Kent	Jul-11
£10,000	45XL942050	£100	South West Wales	Dec-00
£10,000	179EW933490	£600	Essex	Mar-11
£10,000	470FX226188	£1,000	Devon	Sep-21
£10,000	415TS600988	£825	Overseas	Oct-20
£10,000	33SZ432411	£100	Hertfordshire	Jun-93
£10,000	506EB981228	£250	Kent	Jul-22

https://www.thisismoney.co.uk/money/saving/article-12262555/

Exodi

boingy said:

The reality is that neither PB nor the lottery will make you a millionaire unless you are very, very lucky.

Indeed, the sad reality is that the lottery is, as Ambrose Bierce puts it, a tax on people who are bad at math.

It capitalises on the fact we as humans are exceptionally bad at comprehending large numbers.

While I can visit the lottery website and see that the odds of winning the jackpot are 1 in 45,057,474 (or 139,838,160 for the EuroMillions), I've never seen tens of million people at one time, so I couldn't possibly comprehend how infinitesimally small my chances are. My brain (and the lottery) might rationalise it as "well somebody has got to win it, why couldn't it be you?" or "it's only a couple of quid".

But in reality, it's not dissimilar from walking into the casino every week and putting a couple of quid on a single number on a roulette table. The only difference is there isn't 36 other numbers on this roulette table, there are 45 million - most would agree that roulette is not a good financial decision (and the ROI is similar for lottery winners as it is in casinos, money in =/= money paid out) but the lottery seems to skillfully evade being tarred by the gambling brush by donating to charities and building youth centres and stuff.

I'd actually go so far as to say that premium bonds are in the same vein as my previous comment, and I would not personally recommend people use them in place of traditional savings products (except in the case there is a specific reason to do so - e.g. they are held in a tax free wrapper) - but then I understand that life is short and I don't want to be the 'fun-police' removing peoples hope of becoming overnight millionaires (however remote).

Exodi

GalacticaActual said:

An article this afternoon, which is based on the July 2023 prize draw:

The lucky dozen! How 12 Premium Bonds holders with pots of £1,000 or less scooped prizes between £10,000 and £100,000 in the latest draw

Prize value	Winning Bond number	Total value of holdings	Location	Date they purchased the winning Bond
£100,000	117HB416722	£300	East Sussex	Oct-06
£100,000	127MW685934	£500	Outer London	Apr-07
£100,000	102LW635263	£1,000	Leicester	Oct-05
£25,000	240AN945527	£500	Northern Ireland	Jan-15
£25,000	30SB521959	£205	Northern Ireland	Jun-92
£25,000	182NH718384	£913	Kent	Jul-11
£10,000	45XL942050	£100	South West Wales	Dec-00
£10,000	179EW933490	£600	Essex	Mar-11
£10,000	470FX226188	£1,000	Devon	Sep-21
£10,000	415TS600988	£825	Overseas	Oct-20
£10,000	33SZ432411	£100	Hertfordshire	Jun-93
£10,000	506EB981228	£250	Kent	Jul-22

https://www.thisismoney.co.uk/money/saving/article-12262555/

What a sensationalist article, it makes me wonder if it has been sponsored.

I'd be interested if they also published an article about the millions and millions of people holding small balances who, as usual, didn't win anything.