Premium Bond Winner ?

Podseas

OTOH you could argue putting that 5k in a regular/easy saver paying over 5% and buying the occassional lottery ticket with the interest would be a better choice.
You'll get over £250 interest in a year and you could spend £50 of that in a year on Euromillions tickets whenever the jackpot goes over say £75M. Guaranteed 4% return and a bit of gambling "fun" every few weeks. Or forego the 4% interest and buy 2 tickets a week for even more "fun". Its not so different from Premium Bonds.

(The math clearly changes for those who are higher rate taxpayers or have over 20k in savings.)

sludgesurfer

Below are my premium bond winds for the last 8 years.  

For all but the first year, I've had the maximum amount invested.  (in the first year I think i only had £30k).  Wins have been pretty er... underwhelming.  From memory, my biggest single monthly win was £175.

For this period, I've been a higher rate or additional rate tax payer so the tax free element was attractive for this portion of cash held outside tax-protected accounts.  However, given my luck, for certain years, I'd have been better with a savings account and paying the tax on the interest.

		2015	2016	2017	2018	2019	2020	2021	2022	2023 (to date)
Premium bond wins		£500	£575	£675	£675	£500	£675	£275	£700	£1075
Interest		1.25%	1.44%	1.63%	1.35%	1.00%	1.35%	0.55%	1.40%	2.15%

pbcpdeveloper

With the exception of the current year you are pretty similar to me, infact if I had won the same amount as you this year we would be within £25 of each other overall.

Kim_13

pbcpdeveloper said:

With the exception of the current year you are pretty similar to me, infact if I had won the same amount as you this year we would be within £25 of each other overall.

Which app is that? 

Sg28

Eirambler said:

With the current Prize Bond win rates I can't understand why anyone who has more than 5k in savings would play the lottery. If you fancy a flutter on it just put it in Premium Bonds and worst case scenario you'll get your 5k back (granted inflation would hit it a bit), or more likely you'll get 5k plus two or three prize wins a year for as long as you hold them.

With either approach there's an absolutely minute chance of a big win, but with the bonds it's as close to a free play as you're going to get.

Playing the lottery at all in any circumstance is mathematically nonsensical. The total percentage of money paid in that is returned to winning players is around 50%. Meaning that for every £2 ticket bought you can expect, over the long run to win back £1. Discount the virtual impossibility of the jackpot and its even lower. 

At least with premium bonds the total paid in (interest) is returned. So the return is 100%.

Jami74

nic_c said:

Swipe said:

Jami74 said:

Nothing again on £125 holding. 

I had £100 for 20 years and didn't win a single prize so I wouldn't hold your breath 

Do people who save regularly play the Lottery, or is it the preserve of those who should save instead of buying tickets on the lottery. 

I used to play lottery when I didn't really have enough cash at the end of each week to save, that little hope that £2 could change our lives. Now I save regularly and hate the idea of losing my money playing lottery so when the urge comes to try and gamble my way to a better life I put a few quid into NS&I direct saver and when it reaches £25 buy another premium bond.

eskbanker

Sg28 said:

Playing the lottery at all in any circumstance is mathematically nonsensical. The total percentage of money paid in that is returned to winning players is around 50%. Meaning that for every £2 ticket bought you can expect, over the long run to win back £1. Discount the virtual impossibility of the jackpot and its even lower. 

At least with premium bonds the total paid in (interest) is returned. So the return is 100%.

Unless I'm misinterpreting your post (and I certainly don't understand the reference to "total paid in (interest)"), simplistically portraying comparative 'returns' of 50% and 100% is also mathematically nonsensical!  The lottery payouts are practically instantaneous, but the full capital on PBs is only paid back after holding them for that period, during which it will have been reduced in real terms value by inflation, so that timing forms an important part of any meaningful comparison, as do the prizes won, which should partially offset that inflation effect.  The relative odds of winning prizes also need to be taken into account, as the odds of a single lottery ticket winning a prize are far better than a single premium bond winning one in any given draw.

Don't get me wrong though, PBs undoubtedly make more sense (for most) than playing the lottery, but it's not meaningful to try to arbitrarily separate out a notion of 50% versus 100% 'returns'!

sludgesurfer

Thanks pbcpdeveloper, very interesting to see someone elses results over a similar timeframe with a similar amount invested.  Interesting to see your year end totals.  Best of luck.

On a side note, I'm thinking of moving out of premium bonds and into gilts to capture a better rate and still maintain the tax benefits as gilts are free of CGT.

mandarin6

Has anyone else picked up how lucky bond number 551QT is?  This month it was drawn out for 25k, 10k, 5k, 100 x18, 50x21 and 25x12.  I decided to check Octobers draw ( the first time it was eligible ) and it got drawn out for 1k, 500, 100x22, 50x11 and 25x7.  They say Ernie is random however whatever system is converting certainly isnt IMO. 

eskbanker

mandarin6 said:

Has anyone else picked up how lucky bond number 551QT is?  This month it was drawn out for 25k, 10k, 5k, 100 x18, 50x21 and 25x12.  I decided to check Octobers draw ( the first time it was eligible ) and it got drawn out for 1k, 500, 100x22, 50x11 and 25x7.  They say Ernie is random however whatever system is converting certainly isnt IMO. 

551QT isn't a bond number as such, it's the first few characters shared by a large collection of bonds, probably a million.

It may be the case that this million happens to have won more prizes than other millions over the past month or two but that doesn't negate randomness, in fact it probably emphasises it - many seem to believe that random must equate to even distribution but of course it doesn't, so a given block of a million bonds should on average win 47 prizes in a draw, but naturally some will win much more and others less....