Premium bonds

50
Posted 10th Jun 2020
I have a large amount of savings and only getting £8 or £9 interest per month on my regular savings account with Barclays. I currently have a help to buy isa which is slowly building up nicely but you can only put £200 a month in. Is it worth me putting some in to premium bonds? It would be £10k+ but leaving some still a good amount in the savings account.

Does anybody use premium bonds and have much luck?

Edit - I’ve set up an account and deposited in £14k, I wouldn’t miss the £8 or £9 interest I was getting, with the possibility of getting slightly more.
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I’m literally in the same boat, just today I transferred a few thousands I had sitting getting literally no interest into my bonds account. Going to in the august draw so we’ll wait and see if I get anything. If you’ve got spare savings and don’t mind missing a few pounds interest I’d recommend premium bonds as you may win larger amounts than the interest but then again you may not win anything so it’s just a chance game really.
I have premium bonds...but a higher amount.
This is the link to predicted luck calculator.
moneysavingexpert.com/sav…or/
£10k may possibly give you £100 a year (tax free), but not guaranteed.
It's a flip of the coin - I've been lucky...
If you still have a mortgage or any other debt, you're better paying these off early. If, however, you have an amount in the bank gathering no interest it should be fine. You don't lose your investment, other than that lost from potential interest and inflation.
The risk is that you forego any interest in the hope that you'll win a prize, be it £25 or more. You could go years without a single win no matter how much you put it.
On the flip side, you won't lose any of your money (with the exception of inflation eating away your buying power).

I've won £25 in the past 4 years or something like that.
Martin Lewis has a good section about it on his website.
With interest rates so poor and Santander 123 reducing interest to 0.6%, today I've just transfered a chunk into premium bonds. I remember when I was getting £50 per month interest now its going to be around £10, not worth keeping my money in that account anymore.
I invest in mutual funds with a mixture of relatively secure ones and some high risk investments.
Can i buy PB. On my child’s name (14years old) ?
I was actually going to start a thread about premium bonds

I went to register online, and it knew what bank accounts I had

is this because of my info I gave? address, D.O.B etc ?
I started with pm bonds in Oct last year. (£2000) Won £25 Dec and £25 may draw. I have now put in £9000 sacrificing the £7.50 per month in interest I would get at 1%. I think that works out a one in 3 chance of winning. I will eventually put in approx £12000 sacrificing £10 per month in interest at 1% but then a one in two chance of winning. I know I could go the whole year and win nothing........ I am optimistic of winning.
Edited by: "steve.t" 10th Jun
I have been saving into PBs from few years like £100 here and £200 there. Is it possible to bunch my bond numbers together without taking them out and reinvesting as a one chunk. Anyone got a clue. I tried to find it on their website but there is nothing. Which means it's not possible.
Djpal12310/06/2020 19:53

Can i buy PB. On my child’s name (14years old) ?


I believe u certainly can.
doorswitch10/06/2020 19:55

I have been saving into PBs from few years like £100 here and £200 there. I …I have been saving into PBs from few years like £100 here and £200 there. Is it possible to bunch my bond numbers together without taking them out and reinvesting as a one chunk. Anyone got a clue. I tried to find it on their website but there is nothing. Which means it's not possible.


bond numbers are automatically bunched together

so your numbers might be
000100
you put £1000 in
001100
you put £20,000 in
021100

etc etc
Mendoza10/06/2020 20:05

bond numbers are automatically bunched together so your numbers might …bond numbers are automatically bunched together so your numbers might be000100you put £1000 in001100you put £20,000 in021100etc etc


Thanks for the reply but I meant to say if I put £100 each month for 12 months, then I will have 12 separate bunch of 100 bond numbers. But I want to have 1200 bond numbers together without pulling them out and reinvesting again if that make sense. Can't find the option anywhere.
doorswitch10/06/2020 20:19

Thanks for the reply but I meant to say if I put £100 each month for 12 …Thanks for the reply but I meant to say if I put £100 each month for 12 months, then I will have 12 separate bunch of 100 bond numbers. But I want to have 1200 bond numbers together without pulling them out and reinvesting again if that make sense. Can't find the option anywhere.


Hi, you can't change that. It's selected at the time at the next allocation of numbers. I don't really understand why you you want a consecutive block. It doesn't change your chance of winning. As for taking them out, you can pull all of them in one go.
doorswitch10/06/2020 20:19

Thanks for the reply but I meant to say if I put £100 each month for 12 …Thanks for the reply but I meant to say if I put £100 each month for 12 months, then I will have 12 separate bunch of 100 bond numbers. But I want to have 1200 bond numbers together without pulling them out and reinvesting again if that make sense. Can't find the option anywhere.


As chance has no memory, you should theoretically have the same odds as 12 separate bonds or one larger bond.

It takes a whole calendar month before your bonds are in the draw, so you're actually lowering your chances of winning on your investment by withdrawing and reinvesting.
Edited by: "britlad" 10th Jun
You need to buy in batches of around £2000 for them to be worth while as the odds are around 1 in 24000 and it's drawn each month.
Anything less and you can be waiting decades to win anything.
Why in bunches of around 2000?
britlad10/06/2020 19:24

If you still have a mortgage or any other debt, you're better paying these …If you still have a mortgage or any other debt, you're better paying these off early. If, however, you have an amount in the bank gathering no interest it should be fine. You don't lose your investment, other than that lost from potential interest and inflation.


I don’t have any debt at all, I currently live at home. I was going to buy a house until the buyer withdrew from the sale and now left with what was going to be the deposit, probably won’t be house hunting for a while now.
Djpal12310/06/2020 19:53

Can i buy PB. On my child’s name (14years old) ?


Yes, there was an option to buy for a child.
Well done, Miss B. You sound like a sensible saver.
Mendoza10/06/2020 19:53

I was actually going to start a thread about premium bondsI went to …I was actually going to start a thread about premium bondsI went to register online, and it knew what bank accounts I hadis this because of my info I gave? address, D.O.B etc ?


I’m not sure, I signed up as a new user and had to enter all my details.
Manny5010/06/2020 19:17

I’m literally in the same boat, just today I transferred a few thousands I …I’m literally in the same boat, just today I transferred a few thousands I had sitting getting literally no interest into my bonds account. Going to in the august draw so we’ll wait and see if I get anything. If you’ve got spare savings and don’t mind missing a few pounds interest I’d recommend premium bonds as you may win larger amounts than the interest but then again you may not win anything so it’s just a chance game really.


Interest rates on savings are so bad, it’s worth the gamble. I wouldn’t miss the £8 or £9.
britlad10/06/2020 22:22

Well done, Miss B. You sound like a sensible saver.


Thanks, my mama taught me well
with interest rates being so low at the moment, premium bonds do look attractive but i don't know if they have reduced the number of prices to reflect the lower interest rates themselves.

in general premium bonds are luck based, so if you have better than average luck then you will benefit, but if you are the sort that never wins anything and just damn right unlucky then it is not for you.

no harm in shoving a few grand in there and see. the potential interest that you forgo with the money in a savings account is not great at the moment so you are not really losing anything much and you may have a chance to win something big.

i find that premium bonds are exciting when you open the account and then you forget all about it and get bored with it if you don't win much or you don't win at all.
britlad10/06/2020 21:49

Why in bunches of around 2000?


Odds of winning anything are 1 in 24500 and are drawn each month.
24500/12=2041.
So buying £2041 means in theory you should win once a year.
So on the same basis if you only buy £20 (ok minimum is £25) worth the odds work out you only win once in 100 years.

Sure as it's random you could buy just the one bond and win the top prize in the first month, but realistically that's not going to happen.
joedastudd10/06/2020 23:11

Odds of winning anything are 1 in 24500 and are drawn each …Odds of winning anything are 1 in 24500 and are drawn each month.24500/12=2041.So buying £2041 means in theory you should win once a year.So on the same basis if you only buy £20 (ok minimum is £25) worth the odds work out you only win once in 100 years.Sure as it's random you could buy just the one bond and win the top prize in the first month, but realistically that's not going to happen.


Premium bonds aren't luck based.
Your £1 bond has the same chance of winning as someone else's £1 bond. There's no luck involved at all.

Or have I just been trolled with the luck thing?
Edited by: "britlad" 10th Jun
britlad10/06/2020 23:18

Premium bonds aren't luck based.Your £1 bond has the same chance of …Premium bonds aren't luck based.Your £1 bond has the same chance of winning as someone else's £1 bond. There's no luck involved at all.Or have I just been trolled with the luck thing?


it is luck based. here is a detailed analysis from martin if you have the energy to read it all.

moneysavingexpert.com/sav…ds/
joedastudd10/06/2020 23:11

Odds of winning anything are 1 in 24500 and are drawn each …Odds of winning anything are 1 in 24500 and are drawn each month.24500/12=2041.So buying £2041 means in theory you should win once a year.So on the same basis if you only buy £20 (ok minimum is £25) worth the odds work out you only win once in 100 years.Sure as it's random you could buy just the one bond and win the top prize in the first month, but realistically that's not going to happen.


I'm hope someone with a better understanding of statistics than me will help me understand this.
Luck, even if it does exist, plays no factor on your £1 investment having a higher chance of winning than someone else's £1.

Martin explains averages and the chance of winning. Someone has to win a prize. Do we call them lucky, despite them having the same chance of winning as someone else with the same investment?

This is where I'd appreciate someone with a decent grasp of statistics to help me understand this luck thing and how luckier people allegedly have a higher chance of winning more.

mutley1:

"in general premium bonds are luck based, so if you have better than average luck then you will benefit, but if you are the sort that never wins anything and just damn right unlucky then it is not for you."
Edited by: "britlad" 10th Jun
doorswitch10/06/2020 20:19

Thanks for the reply but I meant to say if I put £100 each month for 12 …Thanks for the reply but I meant to say if I put £100 each month for 12 months, then I will have 12 separate bunch of 100 bond numbers. But I want to have 1200 bond numbers together without pulling them out and reinvesting again if that make sense. Can't find the option anywhere.


If that's important to you, buy them monthly, then after a year sell them back and re purchase a new lot with nice shiny consecutive numbers
doorswitch10/06/2020 20:19

Thanks for the reply but I meant to say if I put £100 each month for 12 …Thanks for the reply but I meant to say if I put £100 each month for 12 months, then I will have 12 separate bunch of 100 bond numbers. But I want to have 1200 bond numbers together without pulling them out and reinvesting again if that make sense. Can't find the option anywhere.


no, it is not possible. your numbers at purchase are unique and they need to stay with the bond. if you want to bunch them together then you would need to withdraw them and buy again in a whole bunch but i think there is a delay in going into the draw if you do this.

it doesn't really matter if they stay as £100 sets or they become £1200 sets. i can't remember from the days that i held premium bonds if you could sell part of a set? so say you bought a bond for £100 and you only sell £20 of it?
britlad10/06/2020 23:40

Luck, even if it does exist, plays no factor on your £1 investment having …Luck, even if it does exist, plays no factor on your £1 investment having a higher chance of winning than someone else's £1.Martin explains averages and the chance of winning. Someone has to win a prize. Do we call them lucky, despite them having the same chance of winning as someone else with the same investment?This is where I'd appreciate someone with a decent grasp of statistics to help me understand this luck thing and how luckier people allegedly have a higher chance of winning more. mutley1:"in general premium bonds are luck based, so if you have better than average luck then you will benefit, but if you are the sort that never wins anything and just damn right unlucky then it is not for you."


i have a decent understanding of statistics but i can't help you i am afraid
britlad10/06/2020 23:31

I'm hope someone with a better understanding of statistics than me will …I'm hope someone with a better understanding of statistics than me will help me understand this.


Each premium bond costs £1
Every month a random draw is made, each time there is a roughly 24,500 to 1 chance any given bond will be drawn (these odds are on the premium bonds website)
If you have £2,041 of bonds that means you have 2041 chances to win each month
Over the course of a year you will take part in 12 monthly draws, giving you 24,492 (2041 x 12) chances to win
As the odds are 24,500 to 1 one, and the number of draws you've entered is almost 24,500, statistically it's likely you will get 1 win over the course of the year (although as it's a totally random draw that isn't guaranteed)

The appeal with premium bonds is there is a small chance you could get a big win, £1,000,000 is the maximum.

If you can afford to put £10,000 in, that will be 120,000 chances to win over the course of the year meaning you would have to be incredibly unlucky not to get at least 2 wins in a year.
Edited by: "spoo" 11th Jun
Thanks for replying, Spoo.
I get where you're coming from, but it doesn't explain why it needs to be in 'bunches of around 2000'.

Won't 80 premium bonds of £25 each stand the same chance of winning?

Also, do the odds of winning slightly decrease each month as the number of bonds in the pot increases? I'm guessing that the number invested outweighs the number withdrawn.
pothole10/06/2020 19:24

The risk is that you forego any interest in the hope that you'll win a …The risk is that you forego any interest in the hope that you'll win a prize, be it £25 or more. You could go years without a single win no matter how much you put it.On the flip side, you won't lose any of your money (with the exception of inflation eating away your buying power).I've won £25 in the past 4 years or something like that.



That's not strictly true. Although in theory you could put in £50k and not win anything. After 8 months, you would have more chance of winning the National Lottery than not having won a £25 prize. After 12 months, you would have more chance of winning the lottery twice. Therefore, it is not conceivable that anyone with £50k invested would go more than 12 months without a prize.
Just as an example of the likely return, I have a five figure sum in PB's and over the last 3 years the returns have been 1.4%, 1.6% and 1.2%. Most months I win something.
britlad11/06/2020 08:24

Thanks for replying, Spoo.I get where you're coming from, but it doesn't …Thanks for replying, Spoo.I get where you're coming from, but it doesn't explain why it needs to be in 'bunches of around 2000'. Won't 80 premium bonds of £25 each stand the same chance of winning?Also, do the odds of winning slightly decrease each month as the number of bonds in the pot increases? I'm guessing that the number invested outweighs the number withdrawn.



The pot of prizes is 1.4% of the eligible bonds. The 1.4% varies depending on decisions taken by National Savings and is usually set at a level to be competitive with instant access accounts interest. As they recently took a decision not to reduce it, it is more competitive than most instant access accounts. As a result, the odds remain consistent no matter how many bonds are eligible. The odds only change when they vary the 1.4%.
YMMV.

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