NS & I Premium bonds

Nexus said:
He defiantly has them, as he's always joked about just how bad it's been, and how my Mum wins a fiver every now and then.
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A fiver? The minimum prize amount is £25.

The chances of holding 30k premium bonds for 30 years and winning absolutely nothing are so tiny it can't be true.
There is more chance of him winning the lottery jackpot with a single ticket than going 30 years without a win.
 
Premium bonds offer a very poor return over the long term. They are best thought of as a kind of safe Lottery. You always get your money back (minus cumulative inflation) but every bond gets your a small chance of a win. Usually just £25.... no, usually £0. :-) But, as with the Lottery, there's always a chance you'll get a larger 'prize'.

A very, very, very small chance indeed, but a chance all the same. I have about £1200 left in PBs and my last £25 was about 18 months ago. I treat is as my emergency fund because it takes a while to get your money back, so isn't likely to get drawn out to cover more mundane needs.
 
Andrew_McP said:
A very, very, very small chance indeed, but a chance all the same. I have about £1200 left in PBs and my last £25 was about 18 months ago. I treat is as my emergency fund because it takes a while to get your money back, so isn't likely to get drawn out to cover more mundane needs.
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Can't you stick that money in an ISA? You'll get more in the interest from it, and I don't think it will be any harder to get the money out of either. Looking at the MSE page I posted last page:
http://www.moneysavingexpert.com/savings/premium-bonds

The odds of winning the £1million are 1 in 43,193,782,860
Even the odds of winning £25 are 1 in 24,000

So, each month, how many tickets win absolutely nothing? 42,060,138,324

42 billion tickets a month win no prize.
 
My grandad put the maximum in (30,000) and wins about 2 25's per month, sometimes more, sometimes less. But not everyone has a spare 30,000 pound lying around.
 
All the prizes are always won. Don't listen to what the stats say, the chance of winning £1M outweighs the lower APR you get on average.

Besides, in a year i won £50 on my £500 deposit, i'd like to see you find me an interest rate that good elsewhere. I can win nothing next year and still have a better rate than an ISA, I might also win a million quid too!
 
iviv said:
Can't you stick that money in an ISA?
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My only pension will be what's in my Cash ISA, so that gets topped up every year before I allocate myself a toy budget from my somewhat weedy wage packet.

The PB money is essentially written off in the same way I would write off £1 on the Lottery (if I ever did it). It's there for emergencies, and a tiny glimmer of hope for a "get out of jail free" card. I try to be rational with money, but everyone has to have a weakness. :-)

The OP's £100 would probably be better saved towards investing in a decent suit. That might help in an interview for a better job and a more rewarding career. That's what I'd probably advise myself to do with it if I was going back 25 years.
 
Andrew_McP said:
My only pension will be what's in my Cash ISA, so that gets topped up every year before I allocate myself a toy budget from my somewhat weedy wage packet.
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Fair enough, if you're maxing out your ISA allowance then the bonds aren't such a bad idea, since you can't lose the initial deposit, only the interest you could have gained. And with how the banks are currently doing...

Besides, in a year i won £50 on my £500 deposit, i'd like to see you find me an interest rate that good elsewhere. I can win nothing next year and still have a better rate than an ISA, I might also win a million quid too!
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I won £50 on £500 worth of lottery tickets! I dare you to find such a solid investment anywhere else! And I could have won two million quid too! :rolleyes:
 
pcoltrane said:
A fiver? The minimum prize amount is £25.

The chances of holding 30k premium bonds for 30 years and winning absolutely nothing are so tiny it can't be true.
There is more chance of him winning the lottery jackpot with a single ticket than going 30 years without a win.
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I was thinking of the lottery, I thought the minimum was a fiver. Like I said, I've not even won the minimum myself before!

It was a couple of years ago I last chatted to him about it, so perhaps he's won something now. But as I said, he had won nothing from it over that period with the full investment, I've got no reason to lie about it.
 
What sort of net return is acheiveable in a low risk investment portfolio with 20k? I understand you can just give the money to a company and let them do whatever it is they do. I understand the value of my investment can go up as well as down.
 
Nexus said:
I was thinking of the lottery, I thought the minimum was a fiver. Like I said, I've not even won the minimum myself before!

It was a couple of years ago I last chatted to him about it, so perhaps he's won something now. But as I said, he had won nothing from it over that period with the full investment, I've got no reason to lie about it.
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The odds of him not winning anything after 30 years are less than 1 in 3million

Is it not possible that he is not aware of his winnings? (eg being sent to an old address) The premium bonds website say they have over 680,000 unclaimed prizes. It might be worth putting his holder number into the search for unclaimed prizes on the website.
 
pcoltrane said:
The odds of him not winning anything after 30 years are less than 1 in 3million

Is it not possible that he is not aware of his winnings? (eg being sent to an old address) The premium bonds website say they have over 680,000 unclaimed prizes. It might be worth putting his holder number into the search for unclaimed prizes on the website.
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I don't know how many times I need to repeat myself. :p
 
We were toying with putting a lot into premium bonds (Max) but after reading money expert site maybe something else needs to be considered.
 
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