Is it still worth having any Premium Bonds?

FlorayG

subjecttocontract said:

Most people are loosing at best a few hundred quid in interest with premium bonds in exchange for a chance of winning more. I have a neighbour who spends hundreds of pounds on scratch cards and wins virtually nothing. It's whatever rocks your boat. It's called fun, remember that ?

Absolutely. The great feeling when you DO win is worth it even if it's a small prize!

badger09

nic_c said:

badger09 said:

gravel_2 said:

subjecttocontract said:

I'm only aware of the rate published by NS&I which is currently 4.4%.....where does your 'headline' rate come from ?

Worth looking here to see the average/expected return for your holding: https://premiumbondsprizes.com/#0

4.4% is the total amount paid out by NS&I on the aggregate amount held in PBs by all holders. But if consider a full holder winning £1m, that's a 2000% return in a month. £100k winning is 200%. These big pay outs erode the overall average annual pay out a normal punter with normal luck should hope to receive. If you make on average 4.4% from PBs you actually have quite good luck.

PBs have a place, especially for higher tax payers but saying "premium bonds pay an average 4.4%" is not helpful particularly to those reading about PBs without having any other understanding of them.

I wish I hadn’t followed that link. With my holding, my ‘Jackpot chance of winning £1000,000 over a year’ is 1 in 287,279,092. I’d be happy with a single £25 (in over 50 years). 

Do I feel lucky🤔

Does that mean your total holing is £18?

Yup. 

Bought for me in £2 lots in 1956/7 by a long ago deceased family friend. £2 then, would be about £50 now, which was way more than any of my immediate family could afford. 

edgex

FlorayG said:

Gosh I've started a maths argument  
Anyway thank you all. I kind of like the chance element and if I buy £100 a month that's only missing out on a potential £60 a year I can take that. Plus it's a good savings account, even though it pays no interest, because your money is accessible but not instantly, which will make me more circumspect about withdrawing it and spending it. I think the decider is - are you wanting the best possible return or are you willing to take a risk? And at least the money isn't lost as it is on the lottery.

What you should also do is set it so that any prizes are automatically reinvested, as those new bonds will go straight into the next months draw.

I do now hold the max amount, but having the prizes add to it has helped.