FAO Premium Bond Holders

[Zak33]

Lo people,

Premium Bond odd's for a winner just got a bit better

All of this year they've been on around a 36,000 to 1 odd of a winner every month and the scale of wins per month was:

1 x £1million
2 x £100k
3 x £50k
8 x £25k
20 x £10k
37 x £5k

and obviously loads of lower 1k, £500, £100, £50 and then £25's of which there were 1,034,532 people per month.

(yes,,, I have all this in front of me... I keep this kinda weird stuff)

But from Oct onward its now 24,000 to 1 odds
and

1 x £1m
4 x £100k
9 x £50k
18 x £25k
42 x £10k
86 x £5k

etc etc down to £25 x 1,683,024 people per month.

I'm sure a few of you have Premium Bonds and some of you may invest a little per month, as I do... so there ya go.... your money is safe and your chances are getting a lot better

[jackvdbuk]

Zak, on MSE they have a calculator to check whether using bonds would be worthwhile, every time i checked the chances of winning more than in the top rate interest account was always less.

would it be worhtwhile for say to put £100 in there? something small ?

[jim]

Surely you've answered your own question if you've been on MSE?

Of course you've always got the opportunity to win big with the Premium Bonds but at the end of the day, on average, you'll do better with a savings account.

Personally, I like to save gambling for the lottery and go with guaranteed returns on my savings, but different people have different views

[daniel_owen_uk]

I think they say it's only worth the investment if you have used all your ISA allowance and overpaid your mortgage as much as you can, AND are a high tax payer, AND get lucky.

Facts are basically that the prizes are based around the interest rate, so if prizes are going up... you guessed it. The prizes average out to less than the top saving account, so they simply don't make sense unless you are a gambler.

[Zak33]

I see it like this:

I have decided to not overpay my mortgage by so much as I was and place a oner per month into Premium Bonds.

The money, as has been pointed out, is not earning any interest.
The chance of winning is reasonable for something that you're not losing your money on. You can have it, all or part, out, whenever yuo want.

From childhood to my 30th birthday I'd acrued about £400 from my parents and family investing long long ago.... and won around £175 on it.

I made the decision to take a further "risk" while my mortgage rates are as low as they've ever been, to increase my Premium Bond holdings... and hope to win. Small or big.

As and when the rates go back up, I'll decide whether to move all or part of the Premium Bond money into the mortgage again.

It's nice to see that they're paying out a lot more from now on

[Zak33]

The prizes average out to less than the top saving account, so they simply don't make sense unless you are a gambler.

I am a gambler...I gamble that my money is secure and I ca have it back when I want it.. but I might win with it, and meantime am not paying off my mortgage quite so fast.

[0iD]

I have a couple of hundred stashed away in bonds for a rainy day.

[Zak33]

My mortgage is at 3.75 % per year flat rate (not APR)

3.75% divided by 12 months, is 0.3125% per month.

That's what I'd save in interest by paying it into my mortgage

£100 in first month x 0.3125% = £100.31 (so I'm 31p worse off)
extra £100 in secind month = £200.31 x 0.3125% = £200.94
extra £300 in third month = £300.93 x .03125% = £301.88

So in the last 3 months, I'm down £1.88 in interest on my mortgage, and clearly id not pay tax on that as it would have been a saving, not an earning... so I am down £1.88

I have not won yet on those premium bonds.

That £1.88 feels like better value than most other "gambles" cos I still have the £300 if I want.

If we continue to compound that interest, by year end I'll be around a tenner down.

I'll live with that I reckon.

[pauldarkside]

Hardly much of a gamble when the original stake is safe.

[TooNice]

^ It's no different than taking part of my interest each month to buy a lottery ticket/bet on a football match, etc. The fact winning is based on chance makes it a gamble IMO.

[jim]

So in the last 3 months, I'm down £1.88 in interest on my mortgage, and clearly id not pay tax on that as it would have been a saving, not an earning... so I am down £1.88

I have not won yet on those premium bonds.

That £1.88 feels like better value than most other "gambles" cos I still have the £300 if I want.

If we continue to compound that interest, by year end I'll be around a tenner down.

I'll live with that I reckon.

Obviously though, you could be earning more than 0% on your £300 in a savings account/ISA - which is the main issue for some people. Admittedly though, considering you're saving a relatively small amount, whereby even a very good rate of interest will currently net you around a tenner p.a. at best, it may be worth it in your eyes to "spend" that tenner on the potential chance of winning £1m, or whatever it is these days, even if the chances of winning it are pretty appalling.

If you're saving far more though, which is primarily where my comment was based - in response to Jack - then it's not necessarily the best route.



By the way Paul, the reason I called it a gamble is because I consider it to be gambling away your potential earnings (from say a savings account) in the hope that you'll win and beat those earnings, against what the statistics say will happen.

EDIT: Beaten to it on the last point by TooNice

[psychy]

I have £200 in the bonds about 15years ago. Won £50 twice within a year. Put the winnnings back in and since then i have won a massive nothing. No biggie tho....maybe the £1m is waiting for me next month??

[Saracen]

I think they say it's only worth the investment if you have used all your ISA allowance and overpaid your mortgage as much as you can, AND are a high tax payer, AND get lucky.

Facts are basically that the prizes are based around the interest rate, so if prizes are going up... you guessed it. The prizes average out to less than the top saving account, so they simply don't make sense unless you are a gambler.

I don't agree, though it depends on how you define "gambler".

First, as has been pointed out, you don't gamble the stake. So the "gamble" is only the interest forgone. Even that gamble is mitigated by a strong statistical probability of small wins, amounting to a significant part of interest from a savings account which, right now, isn't much anyway.

So the only real risk, over a period, is part of the interest you would have got in an investment account. And you might win a few grand, or just possibly, a lot more.

So it's a gamble, yes, but you need to be adopting a very strict interpretation of the word to say it you need to be a gambler. For instance, I buy a lottery ticket from time to time. In total, this year, maybe a tenner, though I doubt it. Do I expect to win? A few quid maybe, but a large sum? No. However, it's possible. I don't bet on horses or dogs, have never so much as set foot in a betting shop and only very rarely play cards for money .... and when I do, it's for the fun and entertainment, not to make money. And is usually cheaper than an evening in a pub. So I'm gambling, but does that make me a gambler?

I've also been to Las Vegas, oh, a dozen or more times. I might risk five bucks on the slot machines, or a few bucks on a table, but I'll say this, over all my visits over about 15 years, I'm up on the deal. Not by much, but I am.

Buying a lottery ticket is a gamble. Spending a significant sum on them is, in my opinion, a mug's game, because whilst you might win a lifesaving sum, it's a very small chance. Most people, IMHO, do it lightheartedly, hoping but not expecting to win anything worth having. It's just about hope.

Buying premium bonds is rather more strategic, knowing that you can't lose the stake, will probably make a return, certainly over time and stand a respectable chance of coming out up on the game, even if it isn't a huge win.

I'd question your priority list too. I'd certainly say that paying off credit cards etc would be high up the list, for anyone that has an outstanding balance too. In most situations, do that before prioritising savings, though a small emergency fund is always a good idea. Then, any other loans that can be paid off without penalty. Only then think about mortgage reduction, and not all mortgages will benefit from overpayment, especially those lucky enough to have a tracker with no floor. They might be better off putting money into, say, 1 year fixed accounts than paying off mortgage, depending on effective rates.

But ultimately, premium bonds is about taking a chance, gambling if you like, but it's a very limited gamble. It might not be the best idea for those with no other savings but as part of a strategy, I think limited exposure is a perfectly good idea, without needing to be a "gambler", because that term implies something rather more radical than those prepared to take a limited chance. After all, we all "gamble" every time we get in a car - we gamble we won't be hurt or killed in an accident. And some of us lose that gamble. But is everyone that travels by car (or train, plane, boat, pushbike, etc) a gambler?

I agree with Zak's perspective.

[Zak33]

we shall see when I win my first...


£25

[Krakkenbus]

we shall see when I win my first...


£25

I've won £25 twice in the past 3 years.
I actually received a letter last week from revenue and customs telling me that I hadn't cashed my cheque from my last win, which I can't actually remember doing!

[Zak33]

I have £200 in the bonds about 15years ago. Won £50 twice within a year. Put the winnnings back in and since then i have won a massive nothing. No biggie tho....maybe the £1m is waiting for me next month??

well, the point of this thread was so that everyone knew that from Oct 1st the chances of winning got a whole lot better

In fact the winners list goes from 1,034,000 people per month to over 1.7 million winners per month. Not too shabby I don't think.

For those interested, here is a list of last months winners of a grand or more

It shows when they brought the winning ticket, and how much they spent on that purchase (ie the size of the investment on the day they paid for it) and also what their total premium bonds add up too.

30,000 is the most you're allowed to invest.... and no suprise a lot of the top winners hold a lot of bonds.. but there's good earning going on.

http://www.nsandi.com/products/pb/winnerlist.jsp