Premium Bonds Suck

subjecttocontract

It's the fact that the winnings are tax free that does it for me. Once you've maxed out your ISAs ever year there ain't much else left. It makes a difference if you're a 40% tax payer. I look at it that the cost of holding premium bonds is the difference between what you win and what return you could achieve in a savings account. I've managed a 3% return from my p/bonds which is equivalent of 5% return after tax, so I'm sticking with them. Although given the turmoil in the markets after the tariffs gold looks a solid bet.

wmb194

PremiumBondsSuck said:

Newbie_John said:

I think there's sth odd here, 35 years max holding and no wins? That's impossible - 0.012% for a singular year with 0 wins.

When you have £50k the wins won't be allowed back into the bond as it's full and send to your nominated account.

Are you sure they haven't been sent to either some dormant account, by cheque to an old address etc.

I said "no wins of note." I don't call 100 pound wins on a 50,000 pound holding "noteworthy"

But they all add up. Have you worked out your annual percentage returns over the 35 years?

Newbie_John

Yeah and also keeping in mind that it's just recently the "expected" rate went above 4% (now it's below again) being close to 1% for a long time - meaning not many wins.

Now with rate close to 4% this are the chances for £500+ wins:

£500	Every four years
£1,000	Every thirteen years
£5,000	Every 138 years
£10,000	Every 277 years
£25,000	Every 693 years
£50,000	Every 1,372 years
£100,000	Every 2,780 years
£1,000,000	Every 108,423 years

Now keep in mind they were much lower in the past.. 

Murphybear

Newbie_John said:

Yeah and also keeping in mind that it's just recently the "expected" rate went above 4% (now it's below again) being close to 1% for a long time - meaning not many wins.

Now with rate close to 4% this are the chances for £500+ wins:

£500	Every four years
£1,000	Every thirteen years
£5,000	Every 138 years
£10,000	Every 277 years
£25,000	Every 693 years
£50,000	Every 1,372 years
£100,000	Every 2,780 years
£1,000,000	Every 108,423 years

Now keep in mind they were much lower in the past.. 

Surely those are the odds for every individual bond.  If you have the maximum holding of £50k then the odds are rather better

I have about £15k.  All the winnings get automatically reinvested so my total holding is creeping up.  I won 2 prizes last month. One £25 and one £100.  I’ve just checked this month and won again. One £25 and one £100.  My winnings over the last 12 months are about 7%

Being retired for a few years now we don’t need to save up for anything “big”.  A new all singing and dancing tv when the ancient one goes to the great tv heaven and we may replace the car eventually.  We don’t have the mad urge to go in a cruise

Not sure what I’d do with £1million.  Sadly I could never have children and my OH never had any so we don’t need money to leave to anyone in particular.  OH fancies living in Tahiti, I quite like the idea of one of the American style retirement villages (no cringing please, everyone is different) as long as it’s got a swimming pool and a croquet lawn . Plus 2 Maine Coons, they are the largest and hairiest domestic cats. 

If I win next month OH can get his hip replacement done privately, oh the joys of getting older. 

masonic

Murphybear said:

Newbie_John said:

Yeah and also keeping in mind that it's just recently the "expected" rate went above 4% (now it's below again) being close to 1% for a long time - meaning not many wins.

Now with rate close to 4% this are the chances for £500+ wins:

£500	Every four years
£1,000	Every thirteen years
£5,000	Every 138 years
£10,000	Every 277 years
£25,000	Every 693 years
£50,000	Every 1,372 years
£100,000	Every 2,780 years
£1,000,000	Every 108,423 years

Now keep in mind they were much lower in the past.. 

Surely those are the odds for every individual bond.  If you have the maximum holding of £50k then the odds are rather better

They are the average times to win each of the medium to large prizes if you have a full £50k holding.

If you think each bond will deliver a £500 prize on average every 4 years (48 draws) then you'll be sorely disappointed. That would suggest 50,000 bonds would generate multiple £500 prizes each draw.

The actual average frequency for 1 bond to win a £500 prize is once every 219,298 years. With the higher prizes being even less frequent. You'd be waiting about 5,000 years on average for even a £25 prize.

eastcorkram

masonic said:

Murphybear said:

Newbie_John said:

Yeah and also keeping in mind that it's just recently the "expected" rate went above 4% (now it's below again) being close to 1% for a long time - meaning not many wins.

Now with rate close to 4% this are the chances for £500+ wins:

£500	Every four years
£1,000	Every thirteen years
£5,000	Every 138 years
£10,000	Every 277 years
£25,000	Every 693 years
£50,000	Every 1,372 years
£100,000	Every 2,780 years
£1,000,000	Every 108,423 years

Now keep in mind they were much lower in the past.. 

Surely those are the odds for every individual bond.  If you have the maximum holding of £50k then the odds are rather better

They are the average times to win each of the medium to large prizes if you have a full £50k holding.

If you think each bond will deliver a £500 prize on average every 4 years (48 draws) then you'll be sorely disappointed. That would suggest 50,000 bonds would generate multiple £500 prizes each draw.

The actual average frequency for 1 bond to win a £500 prize is once every 219,298 years. With the higher prizes being even less frequent. You'd be waiting about 5,000 years on average for even a £25 prize.

Makes sense. I had a balance, I think between 14,000 and 16,500, over about 18 months, and won nothing at all. 

Albermarle

masonic said:

Murphybear said:

Newbie_John said:

Yeah and also keeping in mind that it's just recently the "expected" rate went above 4% (now it's below again) being close to 1% for a long time - meaning not many wins.

Now with rate close to 4% this are the chances for £500+ wins:

£500	Every four years
£1,000	Every thirteen years
£5,000	Every 138 years
£10,000	Every 277 years
£25,000	Every 693 years
£50,000	Every 1,372 years
£100,000	Every 2,780 years
£1,000,000	Every 108,423 years

Now keep in mind they were much lower in the past.. 

Surely those are the odds for every individual bond.  If you have the maximum holding of £50k then the odds are rather better

They are the average times to win each of the medium to large prizes if you have a full £50k holding.

If you think each bond will deliver a £500 prize on average every 4 years (48 draws) then you'll be sorely disappointed. That would suggest 50,000 bonds would generate multiple £500 prizes each draw.

The actual average frequency for 1 bond to win a £500 prize is once every 219,298 years. With the higher prizes being even less frequent. You'd be waiting about 5,000 years on average for even a £25 prize.

I have had varying amounts over the years, maybe averaging about £20K.
Only one £500 prize in about 30 years, so same luck with PBs as on the horses !
( Of course have had a lot of smaller prizes)

[Deleted User]

50k holding did not win anything this month. Won £200 first month and £100 the following month.

friolento

My return for 2024-25 on a max holding was 2.7%. This equates to 4.5% for a higher rate tax payer, or 3.38% for a basic rate one. Not stellar but acceptable for HR, and quite bad for BR.

AndyTh_2

Mine was 5% return for 2024-25