Premium bonds? Worth it?

Pudney · 4 Jul 2018 at 14:19

DiscoDave said:
My Premium bonds account has returned more money than what I would have got with a standard cash ISA.

Those saying "no" - Why?

Because you'll be in the minority and PB's have no guaranteed return. Yes you may be better off with PBs, but then you may be even better off if you invested the same funds in lottery tickets.

Other investments you'll definitely have a return, which may be lower.

kinetic747 · 4 Jul 2018 at 17:30

I've won another £25 today. :cool:

I've just checked my prize history and I've actually had them since last October and won £175 so far.

Irish_Tom · 4 Jul 2018 at 18:08

kinetic747 said:
I've won another £25 today. I've just checked my prize history and I've actually had them since last October and won £175 so far.

How much have you got in there?

kinetic747 · 4 Jul 2018 at 18:12

Irish_Tom said:
How much have you got in there?

£8500. Please note that nowhere in this thread have I said they're a sound investment, just that it's somewhere safe until I decide what else to do with the money. I'm in no rush though so there's still a chance of a bigger prize.

Irish_Tom · 4 Jul 2018 at 18:33

kinetic747 said:
£8500. Please note that nowhere in this thread have I said they're a sound investment, just that it's somewhere safe until I decide what else to do with the money. I'm in no rush though so there's still a chance of a bigger prize.

A 2% return isn’t bad over eight months (compared to current cash ISAs for example).

kinetic747 · 4 Jul 2018 at 19:26

Irish_Tom said:
A 2% return isn’t bad over eight months (compared to current cash ISAs for example).

I've been lucky so far and I'm now waiting for the inevitable barren spell if the fortunes of others in this thread are anything to go by.

muon · 5 Jul 2018 at 01:17

D.P. said:
The problem is the mean returns is meaningless because you either get a prize or you don't, and the vast majority of bonds wont win, and thus the vast majority of people with PMs don;t win either.

The median return is 0. So it is perfectly normal to never recieve anythng ever unless you have a decent amount of PB

Whilst the main point of your post is true, the median return is not 0.

Premium bonds go up to a maximum of £50k, where the median return is between £500 1% and £750 (we do also know it can't be above 1.4%, so must be closer to £500). Unfortunately the calculator I'm looking at isn't detailed enough.

https://www.moneysavingexpert.com/savings/premium-bonds-calculator/

For £20k you have a 55% chance of earning at least £250 which would be 1.25%.

D.P. · 5 Jul 2018 at 07:32

muon said:
Whilst the main point of your post is true, the median return is not 0.

Premium bonds go up to a maximum of £50k, where the median return is between £500 1% and £750 (we do also know it can't be above 1.4%, so must be closer to £500). Unfortunately the calculator I'm looking at isn't detailed enough.

https://www.moneysavingexpert.com/savings/premium-bonds-calculator/

For £20k you have a 55% chance of earning at least £250 which would be 1.25%.

My point was, unless you have a lot of PB, the median return is zero.

Old Wino · 5 Jul 2018 at 11:21

50 years - still wating to win something..

hornetstinger · 5 Jul 2018 at 12:12

Old Wino said:
50 years - still wating to win something..

Yeah if you have £100.

I won typically every month if not every two months.

muon · 6 Jul 2018 at 17:42

D.P. said:
My point was, unless you have a lot of PB, the median return is zero.

Even with a £1000 you have a 38.7% of people will win £25 or more. With £2000 that rises to 62.5% for at least £25.

So it depends on what your definition of "a lot" is. For the median to truly be £0 you would have to hold something like less than £1500 (where 52% of people will win £25 or more).

I'm nitpicking but to say for the vast majority of people the return is £0, is I would say false.

D.P. said:
The problem is the mean returns is meaningless because you either get a prize or you don't, and the vast majority of bonds wont win, and thus the vast majority of people with PMs don;t win either.

The median return is 0. So it is perfectly normal to never recieve anythng ever unless you have a decent amount of PB

helpimcrap · 8 Jul 2018 at 19:33

Ok, thanks for the insights all.

From what I read £500 wouldn't get me a lot but £2000 is reasonable chance of return?

I do the post code lottery lol.

muon · 8 Jul 2018 at 21:27

helpimcrap said:
Ok, thanks for the insights all.

From what I read £500 wouldn't get me a lot but £2000 is reasonable chance of return?

I do the post code lottery lol.

Premium bonds give you fair odds.

Postcode lottery is arguably a scam.

Haze · 9 Jul 2018 at 06:14

helpimcrap said:
Ok, thanks for the insights all.

From what I read £500 wouldn't get me a lot but £2000 is reasonable chance of return?

I do the post code lottery lol.

5k, 12 months, 0 return for me

D.P. · 9 Jul 2018 at 06:27

muon said:
Even with a £1000 you have a 38.7% of people will win £25 or more. With £2000 that rises to 62.5% for at least £25.

So it depends on what your definition of "a lot" is. For the median to truly be £0 you would have to hold something like less than £1500 (where 52% of people will win £25 or more).

I'm nitpicking but to say for the vast majority of people the return is £0, is I would say false.

I know how the maths works, the point i was making is that the majority of people have relatively little in PBs, and thus have very low likelihood of wining. the stats I saw indicated that the median was zero. So if you won £25, you are doing better than 50% of the PB owners. This is probably just a reflection of a few hundred thousand people being gifted £100 PBs at some point etc.

Bald-Eagle22 · 9 Jul 2018 at 10:48

Short term savings it’s definitely worth a punt .

Being part self employed I shove all due tax into bonds each month , over the last three years I’ve won £500 on a total of a 32k in investment ( not all at the same time though ) , probably had 12k max in there at any point.

helpimcrap · 9 Jul 2018 at 14:50

In terms of savings then, as I might have them in for a couple of years, would be people advise buying them?

How do I buy them? I might chuck a grand in one for a bit. I keep a couple of grand aside for when I get into trouble for a few months grace.

Haze · 9 Jul 2018 at 15:28

helpimcrap said:
In terms of savings then, as I might have them in for a couple of years, would be people advise buying them?

How do I buy them? I might chuck a grand in one for a bit. I keep a couple of grand aside for when I get into trouble for a few months grace.

Have you read any of this thread, if you want to buy them, then going to their website might be a good start .... ..

helpimcrap · 9 Jul 2018 at 19:30

Haze said:
Have you read any of this thread, if you want to buy them, then going to their website might be a good start .... ..

I have, but where is recommended?

Can I go up the bank or post office and buy them?

kinetic747 · 9 Jul 2018 at 19:35

helpimcrap said:
I have, but where is recommended?

Can I go up the bank or post office and buy them?

Easiest option is to buy them online at NS&I.