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Premium Bonds Suck

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  • subjecttocontract
    subjecttocontract Posts: 2,713 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    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.
  • Newbie_John
    Newbie_John Posts: 1,216 Forumite
    1,000 Posts Second Anniversary Name Dropper
    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:
    £500Every four years
    £1,000Every thirteen years
    £5,000Every 138 years
    £10,000Every 277 years
    £25,000Every 693 years
    £50,000Every 1,372 years
    £100,000Every 2,780 years
    £1,000,000Every 108,423 years

    Now keep in mind they were much lower in the past.. 
  • Murphybear
    Murphybear Posts: 7,977 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    edited 2 May at 5:35AM
    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:
    £500Every four years
    £1,000Every thirteen years
    £5,000Every 138 years
    £10,000Every 277 years
    £25,000Every 693 years
    £50,000Every 1,372 years
    £100,000Every 2,780 years
    £1,000,000Every 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 :D

    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 :D. 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
    masonic Posts: 27,181 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    edited 2 May at 7:41AM
    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:
    £500Every four years
    £1,000Every thirteen years
    £5,000Every 138 years
    £10,000Every 277 years
    £25,000Every 693 years
    £50,000Every 1,372 years
    £100,000Every 2,780 years
    £1,000,000Every 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
    eastcorkram Posts: 909 Forumite
    Part of the Furniture 500 Posts Name Dropper
    masonic 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:
    £500Every four years
    £1,000Every thirteen years
    £5,000Every 138 years
    £10,000Every 277 years
    £25,000Every 693 years
    £50,000Every 1,372 years
    £100,000Every 2,780 years
    £1,000,000Every 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
    Albermarle Posts: 27,812 Forumite
    10,000 Posts Seventh Anniversary Name Dropper
    masonic 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:
    £500Every four years
    £1,000Every thirteen years
    £5,000Every 138 years
    £10,000Every 277 years
    £25,000Every 693 years
    £50,000Every 1,372 years
    £100,000Every 2,780 years
    £1,000,000Every 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]
    [Deleted User] Posts: 0 Forumite
    500 Posts Third Anniversary Name Dropper

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

  • friolento
    friolento Posts: 2,386 Forumite
    1,000 Posts Second Anniversary Name Dropper Photogenic
    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
    AndyTh_2 Posts: 331 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    edited 2 May at 9:05PM
    Mine was 5% return for 2024-25
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