Premium bonds - weird coincidence

[PK99]

Have a look at MSE's latest article on PB's, are they worth it? Dated 1 May 2024. Also contains, by all accounts, a very sophisticated mathematical odds calculator that yields surprising results.

I can't link from here as somehow CC cannot provide a secure link to the site.

A very good article.

Explicitly makes the point that "winnings" each month are not in any way "a win".

 

[Chislenko]

A very good article.

Explicitly makes the point that "winnings" each month are not in any way "a win".

Martin Lewis, a smug tw-t, making a fortune stating the obvious and copy and pasting.

If I won the million on the Premium Bonds I would probably hire a hitman to put the country out of it's misery with this bell end.

 

[SpokeyDokey]

Martin Lewis, a smug tw-t, making a fortune stating the obvious and copy and pasting.

If I won the million on the Premium Bonds I would probably hire a hitman to put the country out of it's misery with this bell end.

Yes, but did you read the article? It was very pertinent to this thread.

 

[SpokeyDokey]

A very good article.

Explicitly makes the point that "winnings" each month are not in any way "a win".

It is also interesting that PB's only make sense under very specific sets of financial circumstances and even then you would need better than average luck to come out ahead.

 

[Legs]

£400 for Mrs Legs this month.

 

[presta]

a very sophisticated mathematical odds calculator

Ah, it's back. They took it offline for a long while.

For a 50k stake over one year:

you would need better than average luck

 

[Tom...]

It is also interesting that PB's only make sense under very specific sets of financial circumstances and even then you would need better than average luck to come out ahead.

It's very specific - they're theoretically only worthwhile if you've exceeded your personal allowance, you've maxed the current year's ISA allowance, you're a higher rate tax payer and you'll need access to the money sooner than your pension (and even then, it's still a gamble)

OR

If you're a 45% taxpayer (£125k+), thus have no savings allowance, it's a good place to hold cash.

 

[SpokeyDokey]

Ah, it's back. They took it offline for a long while.

For a 50k stake over one year:
View attachment 733088



View attachment 733087

And using the median average as average luck the return is poor for many with eg £50k invested over one year: half of all holders would earn less than £1950 per year.

And clearly, this means the majority would return less than the £2200 required to hit the headline 4.4% rate.

The rate itself being somewhat disingenuous in the way it is portrayed albeit technically accurate as an overall prize fund return.

 

[vickster]

If I put my 50k of bonds into a 5% saver, I'd only get £1500 in interest once I've given 40% to the taxman... I hope to exceed that with the PBs

 

[SpokeyDokey]

If I put my 50k of bonds into a 5% saver, I'd only get £1500 in interest once I've given 40% to the taxman... I hope to exceed that with the PBs

Obviously I don't know if you have read the article, there is the May one and now a June update.

If you haven't it may be worth a read. It's a bit lengthy! The maths re return rate is not as simple as it seems, which was News to me.

As @Tom... articulates in the post up above, PB's only work in very specific circumstances.

And then you need better than average luck to come out ahead.

 

[vickster]

Obviously I don't know if you have read the article, there is the May one and now a June update.

What article?

 

[PK99]

What article?

Money saving expert.

 

[vickster]

Money saving expert.

Link?

 

[PK99]

Link?

Google?


https://www.moneysavingexpert.com/savings/premium-bonds/

 

[vickster]

Google?


https://www.moneysavingexpert.com/savings/premium-bonds/

I was asked if I’d read the article, there was no link to it so how was I to know which one…Google links to many MSE articles