Premium bonds? Worth it?

Kainz · 29 Jun 2018 at 16:11

My father has got about 3k in his and wins about £25-50 a good few times a year. I myself chucked in 2k a few months ago as a result.

dl8860 · 29 Jun 2018 at 16:19

As far as my maths goes and using the table on this page https://www.moneysavingexpert.com/savings/premium-bonds/, if you held £3k then you'd expect to win ~£37/year, a return of 1.2%.

And it's a roughly 38 to 1 shot of winning the £50 draw once a year. So if he wins the £50 one more than once a year that is extremely fortunate.

kinetic747 · 29 Jun 2018 at 16:37

dl8860 said:
I've no idea what the odds are, but for Columbo to have won nothing in 23 years with £2k (in 19xx money) and you to have won 5 separate times in 8 months with £8k (in 2018 money), something definitely sounds amiss.

I won twice in one month, two £25 wins so he's extremely unlucky. I'm wondering if he has online access to his bonds as it's possible his wins, if there are any, are being reinvested.

dl8860 · 29 Jun 2018 at 16:43

kinetic747 said:
I won twice in one month, two £25 wins so he's extremely unlucky. I'm wondering if he has online access to his bonds as it's possible his wins, if there are any, are being reinvested.

Yeah almost certainly, odds of winning nothing in 5 years with £2k is 0.7%. Which means the same odds over 23 years is absolutely miniscule.

Diddums · 29 Jun 2018 at 17:03

Still crap returns though.

kinetic747 · 29 Jun 2018 at 17:52

Diddums said:
Still crap returns though.

I'm hoping to win one of the bigger prizes before I put my money elsewhere.

Pawnless Endgame · 29 Jun 2018 at 21:57

Someone from another forum praised Premium Bonds, saying how they started with £500 and a year later it was worth £550 (so +10%). This was back in 2006.

After I bought my house and furnished it (again 2006), I had a bit of money left, so I stuck £1000 in Premium Bonds. Left it in there for 3 years. Did it win anything? Did it ****. I got rid of it when I got made redundant in 2009 as apparently having Premium Bonds would have affected jobseeker's.

SaintJimmy · 29 Jun 2018 at 22:06

Maccy said:
Just done a quick calculation, if you use 2% as an average inflation figure over the last 23 years, you've technically lost around £750!

It's a lot more than that, inflation calculator values it at around £3781.

My Gran had a load of these years ago, won a few £50 but nothing big.

Andrew_McP · 29 Jun 2018 at 22:23

Premium Bonds are to the middle class what Ladbrokes is to the working class. And, as with all gambling, on average you lose out. But at least with Premium Bonds you only lose out at the rate of inflation, and there's always the slim chance of becoming ric.... er, I mean, winning enough to put the deposit down on a London flat.

LeeUK · 30 Jun 2018 at 00:14

My gran has £2K in bonds, won 3x£25 last year so that at least gives a small return. Don't think anything has been won this year though.

muon · 30 Jun 2018 at 01:15

Premium bonds have an okay effective interest rate (1.4% tax free). Not sure why all the negative comments as not many cash ISAs can beat that. Yes you'll get a more stable return with an ISA, but who cares about 1.33% (best current easy access savings account).

https://www.nsandi.com/interest-rates

Angerer · 30 Jun 2018 at 03:07

What do you guys think of this company?

https://www.londoncapitalandfinance.co.uk/

Too good to be true?

Jokester · 30 Jun 2018 at 05:10

muon said:
Premium bonds have an okay effective interest rate (1.4% tax free). Not sure why all the negative comments as not many cash ISAs can beat that. Yes you'll get a more stable return with an ISA, but who cares about 1.33% (best current easy access savings account).

https://www.nsandi.com/interest-rates

It’s because that rate includes the big win as well, strip that out and the rate drops to to about 1% if I remember correctly.

IvanDobskey · 30 Jun 2018 at 06:45

My gran gave me £100 worth when I was a kid. I won £50 the very next month and thought it was great

Totally forgot I even had them when I won £25 a couple of years back

[FnG]magnolia · 30 Jun 2018 at 08:39

I miss the days when [TW]Fox used to go postal about premium bonds

He'd use that 'I'm not angry, I'm just disappointed' tone of voice which was witheringly perfect lol.

dowie · 30 Jun 2018 at 08:46

[FnG]magnolia said:
I miss the days when [TW]Fox used to go postal about premium bonds He'd use that 'I'm not angry, I'm just disappointed' tone of voice which was witheringly perfect lol.

Then you just need to mention a helicopter ride to the Grand Canyon in the same thread to get the double.

LeeUK · 30 Jun 2018 at 11:07

Angerer said:
What do you guys think of this company?

https://www.londoncapitalandfinance.co.uk/

Too good to be true?

Capital at risk. it's OK if you are rich but I assume most premium bond owners can't afford to lose money other than inflation.

muon · 30 Jun 2018 at 11:19

Jokester said:
It’s because that rate includes the big win as well, strip that out and the rate drops to to about 1% if I remember correctly.

What's wrong with that though?

As long as the expected return is 1.4% you aren't getting ripped off or anything.

[FnG]magnolia · 30 Jun 2018 at 12:33

Loves Love Island said:
Then you just need to mention a helicopter ride to the Grand Canyon in the same thread to get the double.

yep!

That's quite the username there, Dowie

Jokester · 30 Jun 2018 at 17:34

muon said:
What's wrong with that though?

As long as the expected return is 1.4% you aren't getting ripped off or anything.

But it’s important to be realistic, hardly anyone wins the big reward.