[Finance] Premium Bonds - prize pool increased again - you ever have any luck?

[Colonel Mustard]

As you do with cash + interest as long as the rate of inflation is higher than your interest rate.

Absolutely right — so you have to do your calculations: is it better to definitely lose a little capital (with a fixed >6% interest rate on a savings account) or probably lose more but just possibly gain more with Premium Bonds? To coin a phrase, "You've got to ask yourself one question: 'Do I feel lucky?'"

You also have to include assumptions about inflation and whether you’re willing/able to accept access restrictions on a high-interest savings account. These are all personal judgements so no one can advise anyone here. FWIW I still have my pension fund and ISAs in stocks and shares. It’s been a terrible 18 months or so but things have picked up again in the last 3 months so I’m planning to hold on and hope to recoup recent falls.

 

[nwgull]

Ok, fair enough, I see that NS&I has increased the prize fund to 4%. But (and it’s my fault for using a phrase like 'effective interest rate') this isn’t the equivalent of an annual rate because it’s obviously not guaranteed, and in fact most PB investors will gain less than that, particularly if they don’t have a big stake in Bonds. Martin Lewis explains this much better than me, about how for one person to earn more than the average, a much larger number of people have to earn less than the average, but his conclusion is that for a majority of people, Premium Bonds are a poor investment. What they offer instead is hope. Like buying a lottery ticket, you agree to the statistical likelihood of you losing money in exchange for the off-chance that you might win big. Despite lottery tickets being a poor investment, I confess to occasionally buying one for the reason outlined! Most of us don’t invest rationally.

All down to the tax, isn't it? If you're a higher-rate payer, then the 6% you can currently get on a 1 year fix is reduced to 3.6%. Also, there's no denying that there's a bit of a fun element to holding a load of PBs.

 

[slimes]

4.65% now.

Natwest isa is 5.7 % maximum £20000 seems the other option via a street bank.
Will that increase?

 

[Mustafa II]

Premium bonds rate increased yet again for the August draw, from 3.7% to 4%.

The main change for this draw will be the prize probability increasing from 24,000 to 1 to 22,000 to 1.

...and another prize rate increase, this time from 4% to 4.65%.

The probability of winning a prize will be 21,000 to 1 from 22,000 to 1.

The number of small prizes (£25) is being REDUCED... but there will be an additional 13 £100k prizes, and 28 £50k prizes.

Good luck everyone!

 

[Ding Dong !]

Premium Bonds £125 this month, £275 last month ( Just under £1K for the year so far )
Loving the interest rate hikes as well......£167 interest this month on one of my savings accounts, then there's the rent increase starting this month too......lovely

 

[Colonel Mustard]

Premium Bonds £125 this month, £275 last month ( Just under £1K for the year so far )
Loving the interest rate hikes as well......£167 interest this month on one of my savings accounts, then there's the rent increase starting this month too......lovely

It's confidential info but TBH this means little without knowing how much your total investment is (and I'm not asking). The chances of getting an above-average return increase disproportionately with the size of investment. Again, Martin Lewis explained this better than I can. But well done, anyway.

 

[Colonel Mustard]

4.65% now.

Natwest isa is 5.7 % maximum £20000 seems the other option via a street bank.
Will that increase?

Who knows re NatWest in particular but if you Google it, you'll find slightly higher rates elsewhere. As a previous poster said, much depends on how much you need quick access as well as your income tax rate.

 

[dazzer6666]

Absolutely right — so you have to do your calculations: is it better to definitely lose a little capital (with a fixed >6% interest rate on a savings account) or probably lose more but just possibly gain more with Premium Bonds? To coin a phrase, "You've got to ask yourself one question: 'Do I feel lucky?'"

You also have to include assumptions about inflation and whether you’re willing/able to accept access restrictions on a high-interest savings account. These are all personal judgements so no one can advise anyone here. FWIW I still have my pension fund and ISAs in stocks and shares. It’s been a terrible 18 months or so but things have picked up again in the last 3 months so I’m planning to hold on and hope to recoup recent falls.

Agreed. Last 18 months have been pretty good for me - but I don’t have a large % invested in bonds, gilts or UK equities. It’s all the ‘low risk’ stuff that’s really suffered (Liz Truss etc) ironically which means difficult conversations for advisers

 

[Wrong-Direction]

I'm sure Martin Lewis said you need at least 10k to have a chance of winning anything

 

[Dick Swiveller]

I'm sure Martin Lewis said you need at least 10k to have a chance of winning anything

Given that I have £1k and have won 3 small prizes, that is guff.

 

[Biscuit Barrel]

Won £100 this month. Had a few £25 & £50 wins in the past, but this is my biggest amount.

 

[Mr Bridger]

Weird this has popped up, as yesterday I received a cheque from NSI for £175, which I thought was strange as usually If I win, ( which has been quite good lately) it goes straight into my bank account. Didn’t recognise the account number on the cheque either. Nevertheless I banked it straight away.
However, I have been having issues with NSI over my fathers bonds after he died last year and have been writing to them over the past year as he was adamant that he had a substantial amount of bonds invested. Every time I wrote to them with the bereavement form etc, they replied with no bonds held under that account.
Couple of weeks ago, I got in contact with his old bank, explained the situation and they kindly went through his old transactions with the NSI and apparently in 2020 he withdraw all his remaining bonds under the account number I had, then 2 months later reinvested £20k under a different account number which I didn’t have! So he was right. I went back to NSI with a complaint that although they gave the the correct information under the old account, they had his name, address etc, they could’ve offered the information that he had other bonds, but didnt.

Back to the cheque (£175) I spent over an hour on the phone yesterday of why I received the cheque, and went through three advisors before they eventually told me it was compensation for the stress and inconvenience of trying to find out about my fathers bonds! No letter explaining this, just a cheque sent through.
Apparently the letter was sent out on August 11th but the cheque got here first. Sod’s Law that will turn up today

The guy on the phone read the letter out and apparently they do recognise that he does have another account, but now of got to get grant of probate to access the account! I’ve sorted all of his estate out without any hassle apart for the bonds.
Shocking to deal with!

 

[slimes]

Weird this has popped up, as yesterday I received a cheque from NSI for £175, which I thought was strange as usually If I win, ( which has been quite good lately) it goes straight into my bank account. Didn’t recognise the account number on the cheque either. Nevertheless I banked it straight away.
However, I have been having issues with NSI over my fathers bonds after he died last year and have been writing to them over the past year as he was adamant that he had a substantial amount of bonds invested. Every time I wrote to them with the bereavement form etc, they replied with no bonds held under that account.
Couple of weeks ago, I got in contact with his old bank, explained the situation and they kindly went through his old transactions with the NSI and apparently in 2020 he withdraw all his remaining bonds under the account number I had, then 2 months later reinvested £20k under a different account number which I didn’t have! So he was right. I went back to NSI with a complaint that although they gave the the correct information under the old account, they had his name, address etc, they could’ve offered the information that he had other bonds, but didnt.

Back to the cheque (£175) I spent over an hour on the phone yesterday of why I received the cheque, and went through three advisors before they eventually told me it was compensation for the stress and inconvenience of trying to find out about my fathers bonds! No letter explaining this, just a cheque sent through.
Apparently the letter was sent out on August 11th but the cheque got here first. Sod’s Law that will turn up today

The guy on the phone read the letter out and apparently they do recognise that he does have another account, but now of got to get grant of probate to access the account! I’ve sorted all of his estate out without any hassle apart for the bonds.
Shocking to deal with!

Indeed.. but... a little bit exciting on how your late father's 20k has done over the last 3 and a half years?

 

[Mr Bridger]

Indeed.. but... a little bit exciting on how your late father's 20k has done over the last 3 and a half years?

Yes, very much so. But now I want to know where any winnings have gone as his bank accounts closed, plus he could’ve earned interest on any winnings

 

[slimes]

Yes, very much so. But now I want to know where any winnings have gone as his bank accounts closed, plus he could’ve earned interest on any winnings

I do hope you keep nsc posted.. I'm sure Nsc could get a poll on how much you think he won?

I'm going for a modest £1375

 

[Paulie Gualtieri]

All down to the tax, isn't it? If you're a higher-rate payer, then the 6% you can currently get on a 1 year fix is reduced to 3.6%. Also, there's no denying that there's a bit of a fun element to holding a load of PBs.

Correct

To also add, higher rate tax payer can earn £500 in interest before any tax is due where as a basic rate payer can earn £1,000 in interest before tax is due

 

[Clive Walker]

£0 won in July. 2.5k invested. Not won a bean in 2 years.

£0 in aug sept and October with £2.7 invested.

 

[Kosh]

I my lifetime - I think my mum and dad bought me £500 or so back in the 90s… I’ve won about twice… £10 and £50 if I recall… I now have over £1500 invested… but my understanding is that 10k is more like a figure that will see a consistent’ return…

In reality I’d be better off going for a savings account, but (I guess) you never know

 

[dazzer6666]

A measly £50 this month…..running at around 2.8% return over the last 6 months.

Edit, Mrs D got £250, 6mth return similar to mine.

 

[Coldeanseagull]

Nothing for the wife, £75 quid for me....a poor month