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Mostly Rational
Posted: 18 August 2024 13:43:10(UTC)
#13

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Median annual returns hover around 85% of the prize pool rate and in my opinion you should hold them if 85% of the prize pool rate is an attractive income tax exempt rate to you and you can tolerate some variance.
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Jay P on 18/08/2024(UTC)
Ian Eccles
Posted: 18 August 2024 14:03:47(UTC)
#14

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My sister won £50k a couple of years ago and her husband won a £1000 prize.
They both have the maximum amount, they rarely go a month without one of them collecting a prize.
it's all luck, nothing guaranteed, if you want to cash in NS are prompt payers.
I sometimes use them to pay my tax bill, put the money into bonds with the chance of a win whilst waiting to pay the revenue or use them when you can't find a share worthy of your money. A good way to keep £50k away from the greedy revenue.
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Jay P on 18/08/2024(UTC), Martina on 18/08/2024(UTC)
TJL
Posted: 18 August 2024 14:20:11(UTC)
#15

Joined: 14/03/2011(UTC)
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There is another, older thread about Premium Bonds, but I can't find it.
Big PB holders seem to make a steady income (circa 5% +), but I don't know whether they factor in the effect of inflation in the gains they report.
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Jay P on 18/08/2024(UTC)
Tim D
Posted: 18 August 2024 14:34:37(UTC)
#16

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For those unaware, there are some useful PB calculators out there
e.g https://www.moneysavinge...emium-bonds-calculator/
tells me that a £50,000 holding has - over one year - these chances of winning:
Quote:
At least £750 Virtual certainty
At least £1,000 99.2%
At least £1,500 83.4%
At least £2,500 17.3%
At least £5,000 1.6%
At least £10,000 1 in 140
At least £25,000 1 in 340
At least £50,000 1 in 790
At least £100,000 1 in 2,386
At least £1,000,000 1 in 103,878

5% yield would be £2,500... about 1-in-6 of full-whack holders according to the above. If you think that's the norm, I suspect it's a case of some lucky winners being more vocal than those who didn't do so well.
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5 users thanked Tim D for this post.
Jay P on 18/08/2024(UTC), Dentmaster on 18/08/2024(UTC), Mostly Retired on 18/08/2024(UTC), Mr Bean on 03/11/2024(UTC), Greylocks on 05/11/2024(UTC)
Jay P
Posted: 18 August 2024 14:59:11(UTC)
#17

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NSI currently suggest average winnings of 4.4%.
And no, I won't be holding them to it.

But it does seem an inexpensive way to store a 'break glass in emergency' stash.
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Dentmaster on 18/08/2024(UTC), Mostly Retired on 18/08/2024(UTC)
Stephen B.
Posted: 18 August 2024 15:05:27(UTC)
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andy;316204 wrote:
I would entirely ignore the larger prizes. Consider the £25s, £50s and £100s and ignore anything above that - I am sure people win them but I dont know anyone who has.


I won £500 a couple of months ago - if you have the maximum holding you can expect to win medium-value prizes (£500 and £1000) every couple of years on average. The higher-value prizes are very unlikely, maybe once in a lifetime, and most of them are £5k and £10k so not really life changing even if you do win one.

The low value prizes are a lot more frequent. 80% of the prize fund is in those and the current interest rate is 4.4% so basically 3.52% tax free reliably with some chance of it being more.
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Jay P on 18/08/2024(UTC)
Stephen B.
Posted: 18 August 2024 15:15:57(UTC)
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Also of course it's as safe as anything can be as it's government debt.
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4 users thanked Stephen B. for this post.
Jay P on 18/08/2024(UTC), Thrugelmir on 18/08/2024(UTC), Mostly Retired on 18/08/2024(UTC), Martina on 18/08/2024(UTC)
Stephen B.
Posted: 18 August 2024 15:21:17(UTC)
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Jay P;316243 wrote:
NSI currently suggest average winnings of 4.4%.
And no, I won't be holding them to it.


You can hold them to it in the sense that it represents the total amount they pay out to everyone relative to the total value of all bonds, so someone will get the money - it may or may not be you.
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Jay P on 18/08/2024(UTC)
Mostly Retired
Posted: 18 August 2024 17:44:57(UTC)
#20

Joined: 24/04/2012(UTC)
Posts: 343
deleted - repeating earlier article reference!
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andy
Posted: 18 August 2024 19:29:13(UTC)
#4

Joined: 11/03/2010(UTC)
Posts: 534
Stephen B.;316244 wrote:
andy;316204 wrote:
I would entirely ignore the larger prizes. Consider the £25s, £50s and £100s and ignore anything above that - I am sure people win them but I dont know anyone who has.


I won £500 a couple of months ago - if you have the maximum holding you can expect to win medium-value prizes (£500 and £1000) every couple of years on average. The higher-value prizes are very unlikely, maybe once in a lifetime, and most of them are £5k and £10k so not really life changing even if you do win one.

The low value prizes are a lot more frequent. 80% of the prize fund is in those and the current interest rate is 4.4% so basically 3.52% tax free reliably with some chance of it being more.



Hopefully next month then ... or the month after ...
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