Premium Bond Winner ?

Macsidia

1spiral said:

Prize fund dropping to 4.4% from 4.65% from March draw.

https://www.nsandi.com/products/premium-bonds

Looks like anticipating a BoE drop to 5%

justwantedtosay

To save you working it out. If you have a full holding and 'average luck' the drop in rate should mean 2 more £25 wins a year but 1 fewer £50 and 1 fewer £100. £500 or £1,000 wins will be slightly fewer and further apart, roughly one in 33 months rather than 31, and you'll still never, ever win anything better than £5,000 and probably not even that - though obviously people do, but only those with better than average luck. So in the years you don't win a prize of more than £100, which is most years, you 'should' now win £1,750 (3.5%) rather than £1,850 (3.7%). That's the figure to base estimations of your luck on. It's bad news for me, I've still never had an above average month, best ever was £150.

Eirambler

Macsidia said:

1spiral said:

Prize fund dropping to 4.4% from 4.65% from March draw.

https://www.nsandi.com/products/premium-bonds

Looks like anticipating a BoE drop to 5%

It's more that they raised far too much cash with their stupidly overly generous one year bond in the autumn and now they need to cut PB rates to balance out closer to their annual target. It won't relate to any kind of interest rate change forecast.

jaceyboy

£100 win from £9k

polymaff

To an investor, worth somewhat less  than 3.5% directly, 4.4% to a 20% taxpayer, 7.3% to a 40% taxpayer.  The smaller the holding the lower will be the return.

justwantedtosay

polymaff said:

To an investor, worth somewhat less  than 3.5% directly, 4.4% to a 20% taxpayer, 7.3% to a 40% taxpayer.  The smaller the holding the lower will be the return.

I'm not sure I agree with your second statement. If you only hold a few bonds then you're unlikely to win anything, but I'd have thought the percentage returns would be pretty consistent above a certain level, or in the very long term. In any case, such definite language as "will" shouldn't be used here as it's down to chance, someone could buy 25 bonds and win £4.3m in their first draw, though it's about as unlikely as me ever winning anything more than £100. 
I'd also suggest that the return should be almost bang on 3.5% with a large enough holding and, obviously, more in those years when you win a larger prize, which should be once in 3 or 4 years on average with a full holding. 

eskbanker

https://premiumbondsprizes.com/ offers a model that's been updated to reflect the new prize distribution, which does support median ('average luck') returns increasing in percentage terms with larger holdings:

£1K: 0%
£2K: 2.5%
£3K: 3.33%
£4K: 3.13%
£5K: 3.5%
£10K: 3.5%
£20K: 3.63%
£30K: 3.75%
£40K: 3.81%
£50K: 3.85%

justwantedtosay

eskbanker Surely it all depends on time? Can anyone explain how holding £5,000 bonds for 10 years should give you any less chance of winning than holding 50,000 for one year?
I always base all my 'calculations' and expectations [hopes] on the assumption that I won't ever win a prize of more than £100. I reckon the returns suggested with larger holdings are because the chance of winning big is so much higher with a full holding but in reality it is still so small that it can be ignored and in most years you should hope for 3.5% with a fair sized holding. As I wrote, chances are you'll never win a £10k prize however many bonds you hold. On an infinite timescale every bond should return 4.4%, or whatever the rate is.

eskbanker

justwantedtosay said:

eskbanker Surely it all depends on time? Can anyone explain how holding £5,000 bonds for 10 years should give you any less chance of winning than holding 50,000 for one year?

Yes, my understanding is that the above figures are based on the expected return over a year, and (assuming no changes to prize distribution) the expected return from £5K for ten years should be the same as from £50K for one year, or £10K for five years, or £1K for 50 years, as they all equate to 600,000 individual bond entries each with an identical one in 21,000 chance of winning a prize.

The long-broken MSE calculator reflected these two different dimensions of holding size and duration, but the one quoted above doesn't seem to offer that as an option - https://moneymarvel.co.uk/calculators/premium-bonds/ is perhaps worth a try once adjusted for the new distribution....

Dizzycap

I've put £50 a month into Premium bonds for 10 years and never won a bean. So the theory of new bonds win more is well out of the window.

Nice amount of savings though but getting bored of winning nothing!

 I have noticed when looking through the monthly results that Norwich bond holders do very well each month! Had more £1,000,000 wins than any other area to date!

Essex & southwards seem to generate the most winners and that too gets boring to see after a while.........

It has made me wonder just how random the draw actually is when its the same areas winning large amounts everytime?

I use the NS&I Premium Bond checker every 2-3 months to see if by some miracle I've won £25 and the answer is always a NO!