I agree premium bonds are a good way of saving within an overall investment plan. Like has previously been said you could get a better return with alternative investments, but those come with higher risks. My wife and I have the maximum each and generally win prizes every month, and the winning money is paid into our bank account within a few days of the monthly draw. And there is always the chance of the million pound price.
Just for information and not looking to upset anyone, but I saw this in the latest Martin Lewis newsletter which says the rate is dropping from 4.65 to 4% in March, reducing the overall prize fund by £72k and that the odds remain at 21000:1? Also from the table (and yes I see it’s estimated) the prize fund distribution is much more towards increasing the number of £25 prizes with the number of all greater amount prizes reduced - apart from the two £1million.
Yep, that’s right. The interest rates are coming down so the prize funds drop accordingly. I’m leaving my money there anyway…! Good luck if you buy some..!
Started drawing my full state pension last October but have been getting my local authority one since I was 60. (It's quite small). Have two other private pensions - not a fortune but they'll do and I'm already paying tax so no chance of going back to work! Actually claimed my bus pass before Christmas - won't use it probably but the b*stards will probably cancel those in the future, so better to have it
I've used mine once - as proof of age to the door staff for a laugh when we went into a pub in Brumingjum
Not sure I will get much in February as I had a single £500 win this month, we will have to wait and see.
Morning all. So, have you checked your NS&I prizes yet…? I have.. £500 for me and £100 for my wife..! Good luck all.!
Have you guys equated your annual winnings to a percentage in order to compare your results with what is available for savings accounts before taking account of what HMRC are going to demand?
Just a £25 for me today after £175 in January and £75 in December. I've also just put another another sizeable investment in more bonds, which will be eligible for the March> draws, after being clobbered for tax on savings interest.
I once did that - a few years ago - and calculated then a return of around 6%, I think on my bond holding at the time, and that was with just 2 or 3 figure sums winnings on a (low) five figure sum bonds holding. However, I have my winnings re-invested in more bonds so the 'notional interest rate' is something of a "moving feast" and, on a month by month basis highly variable. I've just done a very rough calculation and my notional interest rate for the year 2023 was around 4.5%. Part of the joy/excitement/benefit of saving via Premium Bonds is the fact that there's always a chance that you'll win a significant prize that could provide an enormous rate of return on your investment, as Kinjane seems to suggest! I know, the likelihood is not exactly great but, regardless, the likelihood of your average bank or building society savings account providing a return equivalent to even a fraction of the £1,000,000 prize (notionally) available from PBs is pretty much ZERO, ZILCH, NIL, NADA. And all PB prizes are tax free! I recently bought my stepson a (used) car when his vehicle abruptly died and the purchase cost was agreed as a loan which he was happy to accept as 'interest free' and repayable over 4 or 5 years. He's a millenial, I guess, and has never been used to being a regular saver so money/savings/future financial needs have never figured greatly in his lifestyle. So, I got him to set up a direct debit of £85 per month to buy Premium Bonds in his name on a prizes re-invested status. I'm hoping this will do 2 things - 1) reduce the overall time it takes him to pay off the loan by adding winning bonds and increased chances of prizes; and 2) give him a 'taste' of the benefits of regular saving. I'm rather hoping that at the end of the loan/payback period he'll leave the direct debit set up and, perhaps,enjoy winning far more than he 'borrowed' for the car!
I do understand that bond prizes are free of income tax but if you are looking to make a realistic comparison with the alternative of a savings account, say, you would then need to take account of the individual’s income tax liability which will differ person by person.
Last year I got £2600 in total prizes, so that is better than money in any bank or building society account, particularly when you realise the tax free status of the prizes. Previous years my winnings were less, more or less in line with the interest rates at the time. So my money is staying there in the hope that one day the BIG one may come in ..! Good luck if you invest ..!
With “winnings more or less in line with interest rates” you must still be a winner because the interest rates option has an income tax liability.
