Premium Bond Winner ?

jak22

It's easy to get distracted by odds and prize value distribution but even after this increase the return will be little more than 3% -behind ISAs and well behind EA and 12 month taxable fixes - and with a BoE meeting soon.

Few would likely consider moving funds into those other savings accounts if they were paying 3% - perhaps banks / NI strategy with rates like this is be just high enough to retain existing balances with only table toppers attracting new funds - but many must be considering whether their PB holding is a good choice even after this change.

Sarahspangles

Sg28 said:

eskbanker said:

ForumUser7 said:

Total number of prizes decreasing.

The total number of prizes remains the same relative to the number of bonds in circulation, and hence the chances of winning a prize continuing to be 24,000 to one per bond per month - the tiny 0.14% drop in total number of prizes will be a reflection of fewer bonds in the July draw compared to June, which will be the first reduction for a long time....

People pulling money out for better savings rate?

Plenty of people are paying a chunk off their mortgage when their fixed rate ends, now interest rates are climbing.

Sg28

Sarahspangles said:

Sg28 said:

eskbanker said:

ForumUser7 said:

Total number of prizes decreasing.

The total number of prizes remains the same relative to the number of bonds in circulation, and hence the chances of winning a prize continuing to be 24,000 to one per bond per month - the tiny 0.14% drop in total number of prizes will be a reflection of fewer bonds in the July draw compared to June, which will be the first reduction for a long time....

People pulling money out for better savings rate?

Plenty of people are paying a chunk off their mortgage when their fixed rate ends, now interest rates are climbing.

Thats true, and infact im doing exactly that in september as soon as my fixed ends.

Although I'll keep the premium bonds as I like the fun aspect. 

eskbanker

Sg28 said:

eskbanker said:

ForumUser7 said:

Total number of prizes decreasing.

The total number of prizes remains the same relative to the number of bonds in circulation, and hence the chances of winning a prize continuing to be 24,000 to one per bond per month - the tiny 0.14% drop in total number of prizes will be a reflection of fewer bonds in the July draw compared to June, which will be the first reduction for a long time....

People pulling money out for better savings rate?

Presumably, yes - there have certainly been plenty of posts on this thread and others anticipating this, but the movement isn't particularly significant, in that the implication of the announcement is that the drop will be about 166million in the next draw, which sounds like a large number until seen in the context of the increase of nearly 1.9billion over the previous four months!

justwantedtosay

The first paragraph below is nonsense but I'll leave it or esbanker's response will make as little sense. The rest of the post is correct, allowing for a little rounding.

Although the headline rate has gone up by 8.8% (from 3.3% to 3.7%) the average prize value has gone up by 12.1%, from £66 to £74. I'm not sure I can explain that...?

Ignoring prizes of more than £100, which are still exceptional, the holder of 50,000 bonds with average luck can now expect £1,475pa, up from £1,325, which is 2.95% against 2.65%. That said, a prize of more than £100 should now come your way almost every 3 years, which is a huge improvement on the 25 years just over a year ago when a £50 win was less likely than a £500 one is now. At the start of 2022 you'd hope for either a £50 or £100 prize every 3 years, now it's 17 a year.

eskbanker

justwantedtosay said:

Although the headline rate has gone up by 8.8% (from 3.3% to 3.7%) the average prize value has gone up by 12.1%, from £66 to £74. I'm not sure I can explain that...?

3.3% to 3.7% is also 12.1%, not 8.8%!

justwantedtosay

eskbanker said:

justwantedtosay said:

Although the headline rate has gone up by 8.8% (from 3.3% to 3.7%) the average prize value has gone up by 12.1%, from £66 to £74. I'm not sure I can explain that...?

3.3% to 3.7% is also 12.1%, not 8.8%!

Oh God! So it is. I worked out that 3.3 is 8.8% less than 3.7 when I should, of course, have been working out that 3.7 is 12.1% more than 3.3. No wonder it didn't make sense. I shouldn't have tried to cut back on the tablets.

polymaff

Some early thoughts:

Interesting to see that the split-up percentages of the prize fund have changed for July.  They are now 10% / 10%/ 80%.

So, prizes you are likely to win before you die were 90% of a 3.3% rate, i.e. 2.97%.  From July 2023 they'll be 80% of 3.7%, i.e 2.96%.

Also the approximation I use is more fuzzy !

It'll be interesting to see how this pans out over the following months

subjecttocontract

Let's not forget premium bonds are tax free.
So 3.7% is really the equivalent of 4.62% for a basic rate taxpayer & 6.16% for a higher rate taxpayer.

eskbanker

polymaff said:

Some early thoughts:

Interesting to see that the split-up percentages of the prize fund have changed for July.  They are now 10% / 10%/ 80%.

So, prizes you are likely to win before you die were 90% of a 3.3% rate, i.e. 2.97%.  From July 2023 they'll be 80% of 3.7%, i.e 2.96%.

Also the approximation I use is more fuzzy !

It'll be interesting to see how this pans out over the following months

The 10/10/80 change happened several changes ago, last year:

https://forums.moneysavingexpert.com/discussion/comment/79700162#Comment_79700162