What's the current thinking on premium bonds?

eskbanker

OldScientist said:

That's a much nicer calculator than the moneysavingexpert one at https://www.moneysavingexpert.com/savings/premium-bonds-calculator/ , except that the latter can compare it against best buy savings accounts for different rate taxpayers.

I gave up on the MSE one a long time ago, as it fell into disrepair for months and was increasingly unreliable - it also had (has?) a quirk whereby its presentation of outcomes and their likelihood was very selective and skewed, so the overall summary it showed bore little resemblance to reality.

Comparison with savings interest returns is very simple so isn't a massively useful feature IMHO, and obviously depends heavily on the individual's headroom within their various tax allowances and nil-rate bands, so really needs to be carried out at a personal level for meaningful analysis.

poppystar

Ammah45 said:

I have had the full 50K for two years and average a win percentage of 4% a year. 

I have never known anyone win more than the odd £100. Does anyone win the so called bigger prizes? Even 5K? Nevermind 100K.  

Well, yes, you can see the prizes in the NS&I list of winners and people on here in the Premium Bond winner thread have reported big wins too.

If you pay tax then 4% would equate to 5% for a basic rate taxpayer with the money in taxable savings or 6.6% for a higher rate taxpayer. 

Not bad given the savings rates available. 

And actually 4% is a very good return annually on premium bonds!

Section62

OldScientist said:

Ammah45 said:

I have had the full 50K for two years and average a win percentage of 4% a year. 

I have never known anyone win more than the odd £100. Does anyone win the so called bigger prizes? Even 5K? Nevermind 100K.  

We've won £500 but no more than that. There is a long list of winners at https://www.nsandi.com/prize-checker/winners so unless you think NS&I are being economical with the truth*, then yes people do win more, just no-one you know (or who've told you about it).....

Very much that.  If I were to win (say) £10,000 then I'd be very selective about who I told, and certainly wouldn't post about it on social media.

mebu60

Ammah45 said:

I have had the full 50K for two years and average a win percentage of 4% a year. 

I have never known anyone win more than the odd £100. Does anyone win the so called bigger prizes? Even 5K? Nevermind 100K.  

I've had a £5k and a £1k this year. Previous £1k win was 9 years ago. I have a FH.

Ex-wife's husband won £25k earlier this year (on less than FH) and my brother's best mate won £25k last month. I'd never heard of anybody winning anything worthwhile before this year. 

molerat

We are currently running at 3.78% so not too bad.  Last dry month was Jan 23 so again pretty good.  Never had more than a £100 win  - although 15 of them this year

PixelPound

Nebulous2 said:

We've had a fair bit in PBs for over 3 years. (In our terms at least)

It was to meet two different needs. We expected to spend a lot of money, with an indeterminate timescale as it needed agreement from someone else. We also expected to need cash to fund the gap between me leaving work and SPA.

Neither of those needs have transpired and we've drawn down less than expected. We more or less just punted the money there and left it with occasional withdrawals. We've gone from £60k to £50k between us in 3 years. 

The cut in rate of return on PBs certainly has me thinking. 

I'm a basic rate taxpayer who will exceed  £1000 in interest in the year. My OH is a non-taxpayer who wont have any tax liability on interest. We haven't contributed to ISAs this year. With over 5% available on a cash ISA and close to that on an easy-access account, my money could go in an ISA and my wife's in easy access. 

Paying (basic rate) tax then savings at 5.5% beats PB, and that's before next months lower PB rate. A flexible ISA should definitely be considered if you've not used this years allowance

mebu60

mebu60 said:

Ammah45 said:

I have had the full 50K for two years and average a win percentage of 4% a year. 

I have never known anyone win more than the odd £100. Does anyone win the so called bigger prizes? Even 5K? Nevermind 100K.  

I've had a £5k and a £1k this year. Previous £1k win was 9 years ago. I have a FH.

Ex-wife's husband won £25k earlier this year (on less than FH) and my brother's best mate won £25k last month. I'd never heard of anybody winning anything worthwhile before this year. 

But a blank this month. Been a while. Can't complain. Excluding the two 'big' wins I'm tracking close to average for the calendar year.