Premium Bond Winner ?

DjangoUnchained

ColdIron said:

Fixed term/rate accounts pay enhanced interest to compensate you for locking it away. PBs are easy access and tax free. Hardly a fair comparison

yes i understand that, but im just talking about my position. Happy to lock it away. Previously highest rates were around 2% so PBs seemed a good idea. I understand about the tax free bit too. I think my PBs have performed under 2% (hard to work out as i didnt always have the full £50k) I suppose the bit of fun in dreaming for a big win is nice but i have several accounts with fixed one year deals maturing at different times  so i think i will pull out 30k and do another one. Just keeping £20k in for easy access and the chance of a win.

inflationbuster

Really miffed this month no wins and very poor return so far.  Don't be fooled by the so called 3% return. 

Invested	Total prize	Yield	Tax Year
£50,000.00	£375	0.75%	22-23
£50,000.00	£425	0.85%	21-22
£50,000.00	£775	1.55%	20-21
£50,000.00	£725	1.45%	19-20
£50,000.00	£950	1.9%	18-19
£50,000.00	£450	0.9%	17-18 starting  Nov

If interest rates rise further may consider pulling out and placing into a fixed rate bond.  

eskbanker

inflationbuster said:

Really miffed this month no wins and very poor return so far.  Don't be fooled by the so called 3% return. 

I don't think anyone (else) is being 'fooled' - it's a matter of fact that the total payout is 3%, but a more realistic 'average luck' expected return, based on the median average rather than the mean (allowing for the distorting effect of tiny odds of large prizes), is about 2.4%, but even that is very much an average and there will be plenty of holders who better that (see above) and many who will achieve a lower return.  That's just the nature of a random draw - winning fewer prizes than that median average doesn't signify anything underhand....

Primrose

"PB wins are tax free and invisible to HMRC just like ISAs. They don't count towards your Personal Allowance or your Personal Savings Allowance"

Yes I understand that but if you were to leave a million pounds fully invested in a savings account for a period while you ponder what to do with it, that surely then becomes YOUR  interest income and that is taxable? 

ColdIron

Primrose said:

Yes I understand that but if you were to leave a million pounds fully invested in a savings account for a period while you ponder what to do with it, that surely then becomes YOUR  interest income and that is taxable? 

You mean not actually in PBs?

db3745

I decided to put a chunk of savings in Premium Bonds 2 years ago when alternative savings rates were useless, and my experience seems to have been better than most. Through 2021 my wife's maximum holding had 7 winning months, and a pay-out of 0.56%. I had half that, with a slightly lower return. Cashed mine in a year ago, but kept the other account, and this has had 10 winning months in 2022, with a sharp improvement since August. Last 5 months = £100 - £50 - £100 - £25 - £150 in December. Oct.- Dec. returns beat the new prize fund rate of 2.2%. Back down to earth with just £25 today, and I know the reasons for holding bonds no longer pass scrutiny, but I've been quite lucky.

soulsaver

£150 on full holding.

Stargunner

Some people are considering getting rid of their premium bonds due to the rate of returns over the last year being poor. The prize fund rate of 3% only became effective this month. From the start of last year the rate was 1.0%, which became 1.4% from June and then became 2.2%  in October. Therefore the average prize fund rate for last year would have only been around 1.4%. Now that the rate is 3% the returns should hopefully be much more lucrative. 

Swipe

This rate increase has been a disaster for me so far. I prefer getting more £25 prizes than nothing at all

South_West_saver

I bought max holding of 50k in Feb 2021 and was not eligible for draws till April. From 22 draws, winnings have been £1075. On 6 of the 22 months, including today, I've won nothing. My maths is rubbish so please be kind if I get anything wrong here, but an online calculator tells me that's an annual return of only 1.17%. The checking if you've won is mildly exciting each month but not worth it at this rate of return!

When I bought, interest rates were all much lower - but I'm now moving out. I may keep a few, but the majority of it is going into a 2 yr ISA at 4.11% fixed, the "rainy day" money into a limited-access account for 3.25% variable, and anything spare into an ISA in next financial year.

For the sake of comparison, if I'd had 50k at 3.25% for the last 22 months that would have earned me £2979 - an extra £1904.