Premuim bonds versus National lottery which has the higher probability to win??

rb10

If you look at this page on the NS&I site, you can see some interesting things about Premium Bonds.

The 'lower value' prizes are those which are up to £100 in value. They make up 99.8% of the number of prizes available - so are by far the most likely category for most people to get in to.

If you assume that you will only receive lower value prizes in a year (a fair assumption, given what I said above), you can expect a return of around 0.89%. This is the figure that people should be using when considering how much interest Premium Bonds give, as it reflects how much you are likely to get back at the end of the year. On the maximum of £30000, it works out at £267, about 1/4 of what you could be getting in a bank.

Ask yourself the question: can I get 0.89% or more (after tax) in a good savings account?

Dopple

If you want to win a smaller amount (say £100,000) then you will get better odds doing the lotteries on Bookmakers sites. For example Pick 5 numbers on the UK lottery at Paddypower, and if all 5 come up you get 110,000-1 odds.
Still a long short put much better odds then trying to get 6 out of 6 on the National Lottery.

Energize

Dopple wrote: »

If you want to win a smaller amount (say £100,000) then you will get better odds doing the lotteries on Bookmakers sites. For example Pick 5 numbers on the UK lottery at Paddypower, and if all 5 come up you get 110,000-1 odds.
Still a long short put much better odds then trying to get 6 out of 6 on the National Lottery.

Your better off with hotpicks for smaller amounts, you can win £7k on hotpicks (4 balls) with 14,000:1 odds.

paulw19

A combination of both perhaps? I dont see why it has to be one or the other. The odds on either are terrible. I admit to spending £20 a month on lottery which I believe is a reasonable amount, but I also spread my money around a variety of products and investments.

McSaver

The 49s and the Irish Lottery offer better odds than both PBs and the National Lottery

chopperharris

Energize wrote: »

Your better off with hotpicks for smaller amounts, you can win £7k on hotpicks (4 balls) with 14,000:1 odds.

So if I purchase 14001 I can have certainty of winning 7k , is 7k a shared pot ie one prize?Then theres any other prizes to add if any.

15 permutations of 4 from 6 , if theres no shared pot then I would have those permutations too so 15 multiples of 7k?

I cant my head around that if its not a shared pot , i wonder why someone just doesnt do it every week if they had 14k.

Aegis

chopperharris wrote: »

So if I purchase 14001 I can have certainty of winning 7k , is 7k a shared pot ie one prize?Then theres any other prizes to add if any.

That's not the way probability works, unfortunately.

The probability of winning with 14000 entries is the same as 1 minus the probability of NOT winning with 14000 entries, or:

P(winning) = 1 - P(not winning)
P(winning) = 1 - (13999/14000)^14000
P(winning) = 63.2%

As you continue to increase the number of entries this will asymptotically tend towards certainty until you buy literally every combination available and make a huge loss because of the purchase cost.

I hope that clarifies things a little.

alared

This is a no brainer,you NEVER lose your money with PB unlike the lottery where you never see your money again.

ChuckCash

alared wrote: »

This is a no brainer,you NEVER lose your money with PB unlike the lottery where you never see your money again.

An alternative would be to put the money in a high interest savings account instead and blow the interest on the lottery.

Can any maths geniuses out there do a comparison?

alared

ChuckCash wrote: »

An alternative would be to put the money in a high interest savings account instead

Please find me one of those