Premium Bond Winner ?

SnowMan

https://forums.moneysavingexpert.com/discussion/comment/82161033#Comment_82161033

It is 4.7% but over 6 months so annualised it's 9.4%pa although I doubt you will be as lucky in the next 6 months, but you never know.

Your £1,000 and £500 wins have super-charged your return. It was almost 1,000 to 1 against you winning at least £1,625 in June.

Interestingly the odds of winning at least £1,650 in smaller wins (£25, £50 and £100) alone in that month were 360 trillion to one. So I'll rule that out as a possibility!

Wednesdayman

It mirrors both my Premium bond record and my gambling record. I have kept track of every bet I've made over the last five years and, whilst I am up marginally, the big wins make up for lots of smaller losses. With gambling it is easy to attempt to play up your winnings, with PB it is impossible to hold more than 50K so you really are just waiting for the big ones.

redux

I feel almost like an imposter on this thread, as I'm at the other end of the scale. I've had three lots of £25 on £250 in about 25 years

That's about one per cent a year. I hadn't thought about that until just now. Something different at say 3 per cent compounding would have doubled. 10 per cent a year compound would have multiplied by 10.

SnowMan

https://forums.moneysavingexpert.com/discussion/comment/82161258#Comment_82161258

If you have a full holding of 50K then the winnings from the smaller prizes (£25, £50 and £100) really start to even out at around 3.5%pa over time (based on current prize rate) as you can see from the chart below.

Thus you are relying on the £500 and above wins to boost your return. Over 3 years you've got about a two thirds chance of winning at least one prize of at least £500. So odds are in your favour but there's still a reasonable chance of a blank.

Of course 80% of the prize fund goes into the smaller prizes (£25, £50 and £100) and so that's why you end up at around 3.5%pa from smaller prizes in the long term (since 4.35% x 0.8 = 3.48%) with 50K at the current prize fund rate. You can see in the chart (the blue line) how smaller prizes are heading to 3.5% as an average return. The variability that remains in the smaller wins is mainly down to the variation in the number of wins and not the variation in the win amount. The average amount of each smaller value win heads to £62 and the variation from that £62 has less than one fifth of an affect as that from the variation in the number of wins.

And then 10% of the prize fund is in the higher prizes of £5,000 and above, and you've only got a 5% chance of winning one of those with 50K over 3 years. So you are 'gambling' 10% of your 'interest' on the outsider.

And then 10% of the prize fund is in the middle £500 and £1,000 wins, so you are 'gambling' 10% of your 'interest' on the odds on horse.

Then there are other considerations. The prize fund rate may be relatively competitive or not competitive from time to time relative to best buy savings. And then the tax position may make the prize fund rate more attractive allowing for tax for some.

disgruntled1234

https://forums.moneysavingexpert.com/discussion/comment/82161080#Comment_82161080

My “large” June win was made up of the following.

£25 x 2

£100 x 1

£500 x 1

£1000 x 1

As you say, I doubt I’ll be that lucky for the remainder of the year!! We were in Ibiza at the beginning of June so it definitely made the holiday more enjoyable!!

Arrietty

No win for me this month so my total for the year remains £775 for £10k holding.

Swipe

https://forums.moneysavingexpert.com/discussion/comment/82163130#Comment_82163130

That's more than I've won this year on £50K

SnowMan

https://forums.moneysavingexpert.com/discussion/comment/82163130#Comment_82163130

For a constant holding of 10K (January to October inclusive ) there's only a 3% chance of doing at least that well!

SnowMan

https://forums.moneysavingexpert.com/discussion/comment/82163222#Comment_82163222

And that sadly puts you into the bottom 5% of bad luck

Podseas

https://forums.moneysavingexpert.com/discussion/comment/82161638#Comment_82161638

Last year a relative won £1800 one month, also compromised of a £1000 and a £500 alongside several £100s. Made quite an impact on their yearly return.
However, a few months earlier they had 3 months in a row of no wins.
Shows how variable the returns can be even on a FH as highlighted in SnowMan's charts.