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

ChuckCash

alared wrote: »

Please find me one of those

Yup, high interest ain't what it used to be.

Slim pickings but i'd say 3%+ is high interest, especially relative to the effective interest rate for PBs which has dropped from 1.8% to 1%

In the context of premium bonds vs lottery, i'm scratching my head over which is best... the prize fund for PBs based on 1% interest rate or flutter on lottery based on 3%

steve23144

ChuckCash wrote: »

In the context of premium bonds vs lottery, i'm scratching my head over which is best... the prize fund for PBs based on 1% interest rate or flutter on lottery based on 3%

£30,000 on PB gives a chance of a jackpot win of 1 in 100,000 over one year.

Put the money in a savings account with 2% interest = £600. Spend that on lottery tickets gives odds of 600 in 14 million = 1 in 23,000, 4 times better than PB. Plus lottery jackpots are bigger on average (average size of shared jackpot = £2m). And you've still got your £30,000 sitting safely in your savings account.

Average winnings over a year it's the other way round:

PB is £300.

With the lottery I'd guess at 600 / 60 * £10 = £100, based on a roughly 1-in-60 chance of matching 3.

exel1966

alared wrote: »

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

You obviously didn't read or understand the posts above. You DO lose money with PB's. It's called inflation and todays CPI figure of 3.20% shows just how more expensive everyday items are getting and how each pound is slowly being devalued.
Your £1 put into a PB today could be worth next to nothing in a few years time.

THEY ARE A GAMBLE ! If you can afford the gamble then go for it, if not save it.

alared

Lets put it this way,you DON`T lose your capital unlike buying lottery tickets which you do lose every time,with a slim chance of a win.
I used to play an online lottery game every day for free and did this for a couple of years,which would have cost £730.
I can count on my hands the number of times I got three up,which made me realise the only winner of the National Lottery is the government who pocket 12.5% in the £.
PB every time,it`s a no-brainer.

exel1966

You will lose a portion of your capital as it's value gets erroded in time, but that's the gamble as you could also win, though as explained above the odds are slim whether it be lottery or PB's and with the BOE coming down so much, there's certainley not much incentive to save.

alared

Would you put a safe,secure £30k on PB --- YES

Would put £30k on the lottery

---

NO

End of story.

withnell

45p in each £ from the lottery goes for prizes, 1% goes for prizes on Premium bonds

=> if you have a savings account earning over 2.22% net, then you'll get a better return putting the interest from this into the lottery than you will in Premium bonds

Many people on this thread don't seem to have got the point, that it's only INTEREST being put on the lottery, not the capital - so exactly the same as premium bonds

Aegis

alared wrote: »

Lets put it this way,you DON`T lose your capital unlike buying lottery tickets which you do lose every time,with a slim chance of a win.
I used to play an online lottery game every day for free and did this for a couple of years,which would have cost £730.
I can count on my hands the number of times I got three up,which made me realise the only winner of the National Lottery is the government who pocket 12.5% in the £.
PB every time,it`s a no-brainer.

Sorry, you've still missed the point completely. You don't go out and put £30k on the Lottery, you put the difference between the expected winnings in Premium Bonds and the interest you get from savings into the Lottery tickets. That way your expected "winnings" (including the savings interest) are still higher than with Premium Bonds and you have about a 4 times greater chance of winning big.

This is especially true for ISA accounts or of basic/non taxpayers.

alared

Well I know where my money`s staying.
Every month I get a free bet with PB and I cannot lose my stake.
With the lottery,12.5% is grabbed right away by the gov.,so much is "wasted" on "good causes" and you have a very tiny chance of winning a tenner.
Don`t forget that when they realise that the 2012 olympics are going to cost a great deal more than they estimated,we know where all the "good cause" money will go.

ChuckCash

alared wrote: »

Well I know where my money`s staying.
Every month I get a free bet with PB and I cannot lose my stake.
With the lottery,12.5% is grabbed right away by the gov.,so much is "wasted" on "good causes" and you have a very tiny chance of winning a tenner.
Don`t forget that when they realise that the 2012 olympics are going to cost a great deal more than they estimated,we know where all the "good cause" money will go.

Well I guess you can argue that from a moral standpoint, PB beats lottery every time, what with olympics and other such "good causes"

But from a purely financial standpoint, keeping the money in a high interest savings account and spending the interest, or a proportion of, on lottery would give a better return on average than PB.