Premium Bond Winner ?

polymaff

Claireybeau wrote: »

Currently have 11k and haven't had a win yet - worth keeping them in bonds or moving to savings? How often are you guys winning at 11k and above - TIA

As a savings product, premium bonds should yield, at present, 1.035% tax free, so your £11k should yield the equivalent of 4 to 5 £25 prizes per annum.

At present I'm just over that 1.035% figure, the OH is almost exactly the same under it

Mee

Haven't posted here for awhile:
=41K bonds

Aug 1x25
July 2x25 & 1x50


Generally experience 0 wins two to three months per year. Not worked out % return.

eskbanker

polymaff wrote: »

As a savings product, premium bonds should yield, at present, 1.035% tax free

Why not the 1.15% quoted by NS&I? I can see your figure is exactly 90% of theirs but can't work out why!

polymaff

eskbanker wrote: »

Why not the 1.15% quoted by NS&I? I can see your figure is exactly 90% of theirs but can't work out why!

NS&I band the prizes into three groups:

"Higher Value" which covers £5,000 up - and which I class as "You'll die first"

"Medium Value" which covers £500 and £1,000, and,

"Lower Value" which covers £25, £50 and £100 which I class as "Reasonably regular returns on 4 to 5 figure sums"

These bands receive a defined percentage of the total prize fund: 5%, 5% and 90% respectively.

I regard only the last band as being relevant when trying to compare PBs with other savings products [Claireybeau's question]

eskbanker

I can understand your logic to a certain extent but quoting a figure of 1.035% suggests a somewhat greater degree of mathematical accuracy than your method of subjective judgement warrants! For instance it seems rather arbitrary to decide that you have a meaningfully reasonable chance of winning one of the 22k £100 prizes but no chance of winning one of the 4k £500 ones....

It is fair to observe that the PB odds are skewed by the large prizes though, with that top 10% of the prize pool being dished out to only 0.23% of the prizewinners!

polymaff

eskbanker wrote: »

I can understand your logic to a certain extent but quoting a figure of 1.035% suggests a somewhat greater degree of mathematical accuracy than your method of subjective judgement warrants! For instance it seems rather arbitrary to decide that you have a meaningfully reasonable chance of winning one of the 22k £100 prizes but no chance of winning one of the 4k £500 ones....

It is fair to observe that the PB odds are skewed by the large prizes though, with that top 10% of the prize pool being dished out to only 0.23% of the prizewinners!

Oh, quite so, and my spurious accuracy was noted as I wrote it. My only defence can be that it allowed you to decrypt the 90%!

I also intentionally didn't classify the "Medium Value" band - could have been classed as "Gambler mode" - as a reflection of the arbitrary nature of my analysis.

I nevertheless stand by my logic as an attempt to give some guidance to Claireybeau - and others. In a fuzzy environment it isn't far off the mark

EDIT: As for the £500 versus £100 issue, there is the effect of granularity. Claireybeau has only 4-5 units of win per annum. What are the odds of 20 units of win coming together in any one month?

eskbanker

polymaff wrote: »

What are the odds of 20 units of win coming together in any one month?

Ignoring the rhetorical nature of your question (?), based on 4,000 £500 prizes every month and circa 68bn bonds issued, every bond has a 1 in 17m of winning a £500 prize in any one month, so about 1 in 1,600 for an 11k bond-holder (or once every 130 years!)

polymaff

eskbanker wrote: »

Ignoring the rhetorical nature of your question (?), based on 4,000 £500 prizes every month and circa 68bn bonds issued, every bond has a 1 in 17m of winning a £500 prize in any one month, so about 1 in 1,600 for an 11k bond-holder (or once every 130 years!)

Quite! Perhaps my class of "You'll die first" should be extended :rotfl:

[Deleted User]

Following have just invested my first £100 pitiful I know but hope to save £1000 p/a for the next 5 years a a way of saving for Disneyland 2022!

JohnRo

I had a 20K punt for the last two draws, withdrew it a couple of days ago. Back to earning a reliable next to nothing rather than SFA. Yes I know, two months..

Just needed to satisfy myself they're a last resort when it comes to (typical) returns.