Premium bonds - weird coincidence

[oldwheels]

Bad month this. Only £25 after a run of £50s.

 

[potsy]

Oh well, hopefully you found somewhere else for it with some interest 👍
I’m not sure how it works with small invstments as the minimum prize is £25 and they state around 2% return or something, which on £500 would clearly be less than £25

I did notice this month that someone with a £649 investment won £10,000!

That's some return

 

[Paulus]

Nothing for myself, MrsP or MissP this month. Our son on the other hand got another £75 to go with the £125 he won last month.

 

[potsy]

My first PB win today, £25

 

[vickster]

My first PB win today, £25

Ditto

 

[Jenkins]

Nothing this month, but I was well ahead of the returns on normal savings accounts already this year.

 

[Deleted member 26715]

Oh well, hopefully you found somewhere else for it with some interest 👍
I’m not sure how it works with small invstments as the minimum prize is £25 and they state around 2% return or something, which on £500 would clearly be less than £25

I did notice this month that someone with a £649 investment won £10,000!

That's some return

I was about to ask it that meant anybody with less than £10K is just storing their money there with no hope of return

 

[potsy]

I was about to ask it that meant anybody with less than £10K is just storing their money there with no hope of return

Lower investment just means lower chances of getting anything, the odds are already quite small so you need to be very lucky!

I am naturally unlucky so doubt I will get another prize for the rest of my life

 

[glasgowcyclist]

I started with an investment of £500 back in April and have been adding £25 per month.
I won £25 last month.

 

[PK99]

When we each had the maximum allowed, we got a return every month but did not beat savings rates, but the advantage was the "winnings" were tax free.

The Gordon Brown played one of his Stealth Tax Cards. Whereas till then the Winnings pot had been related to some average of available NS&I
rates and winnings were tax-free, he changed the methodology to the average NS&I rate LESS a proportion equivalent to the average tax rate paid by taxpayers, the "winnings" remained tax-free in the winners' hands but the probability of winning reduced. We instantly noticed a reduction in our "winnings", did our sums and cashed in our bonds, and put the money with the rest of our investments in Stocks & Shares ISA accounts

More recent changes mean that most people (95%) actually pay zero tax on investment returns.

The key difference is of course the compounding if you reinvest market returns, most people spend their meager PB returns so £1000 in bonds remains £1000. Average winnings on £1000 of bonds over 5 years is, so £200 over 20 years
https://www.moneysavingexpert.com/savings/premium-bonds-calculator/#result

£1000 invested on 1/1/2000 on the stock market and dividends reinvested would now be a pot of around £2200
https://www.cityam.com/how-the-ftse-100-returned-122-in-20-years-but-barely-moved/

As a bit of fun with money, you don't need PB's are ok, as an investment they are cr@p

 

[Once a Wheeler]

If the statisticians amongst us could come up with a proof that ERNIE is not random, they might be able to sell the story to the newspapers for £1m without buying any bonds at all. Randomness, like infinity, is not a concept that most people find intuitively understandable.

 

[BoldonLad]

Martin Lewis mentions Premium Bonds, fairly regularly on his TV program. He does not recommend, nor does he not recommend. In a recent program, he attempted to explain some mathematics to do with averages, means etc, which I did not understand, to arrive at the figure of £10,000 invested as being the "sweet. spot" at which you begin to approach the 1.4% (or soon to be 1%) return, as you holding increases towards the maximum (£50,000) so to does the chance of a return approaching the published rate. Since April, this year, mine have returned £525, which, I win nothing in Jan, Feb, Mar (2021), will be a return of 1.05%, according to my maths.

 

[kingrollo]

Martin Lewis mentions Premium Bonds, fairly regularly on his TV program. He does not recommend, nor does he not recommend. In a recent program, he attempted to explain some mathematics to do with averages, means etc, which I did not understand, to arrive at the figure of £10,000 invested as being the "sweet. spot" at which you begin to approach the 1.4% (or soon to be 1%) return, as you holding increases towards the maximum (£50,000) so to does the chance of a return approaching the published rate. Since April, this year, mine have returned £525, which, I win nothing in Jan, Feb, Mar (2021), will be a return of 1.05%, according to my maths.

As a slight aside - I'm not convinced Martin Lewis knows as much as everyone thinks. A few years ago a travel agent whom I booked with went bump. His advice at the time was just plain wrong.

 

[glasgowcyclist]

I'm not convinced Martin Lewis knows as much as everyone thinks

I'm not so sure. He sold his website to moneysupermarket.com for £87M.

 

[BoldonLad]

As a slight aside - I'm not convinced Martin Lewis knows as much as everyone thinks. A few years ago a travel agent whom I booked with went bump. His advice at the time was just plain wrong.

I was quoting him, not recommending him as I said, his explanation was way beyond my “O” level maths.

I rarely if ever learn anything new from his program, but, IMHO, those who should watch, don’t (eg my youngest daughter), and those who do watch, don’t need to!

Now... I must get on with planning how to spend that £1million, just in case