Premium Bonds

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Premium Bonds

Postby earthmaiden » February 4th, 2019, 12:17 pm

We've talked about them before, I know, but I would be interested to know if anyone has risked using them as a source of income with any success.

I visited a financial advisor this morning to discuss finances for retirement. Amongst other things I have what is considered (in the financial world) to be a small amount of savings currently not doing much which obviously I would like to do something but not tied up or high risk. He suggested premium bonds.

I have heard people before say that they can be worthwhile if you buy a lot. DD invested a lump from proceeds of a house sale for a while and did very well. Today's chap said that his wife has invested £50,000 in them and done very well indeed without having to do anything.

I wonder how much you have to invest before it becomes likely you will do well. I have had 2 since 1956 which have reaped nothing and £100 worth for 10 years or so which have also reaped nothing. Obviously I don't expect people to divulge their finances but do you think £1000, 10,000, 20,000 or only over £50,000 reaps almost guaranteed rewards? I do not have a huge sum to play with but think I might try it and see, I won't be losing much interest and can always sell them again. Any thoughts?
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Re: Premium Bonds

Postby Seatallan » February 4th, 2019, 12:36 pm

We have money invested in premium bonds and we do fairly well. We don't have a win every month but over the year we have fairly consistent ones (albeit small amounts though this month we won £175 :D ). The advantage, of course, is that it is tax-free and there's always the chance you'll hit the jackpot....
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Re: Premium Bonds

Postby Suelle » February 4th, 2019, 12:37 pm

£50,000 is the maximum you can invest.

I hold premium bonds somewhere around half the maximum and it's a rare month when I don't get any prizes at all, but the most I've ever won in a month is £50. Over the years I reckon my average return has been a bit below what NSandI PB says is the prize fund interest rate - 1.4% at the moment. Not a brilliant return, but not bad while interest rates have been so low. It's the gamble of a big prize, without loss of capital, that keeps the money there.
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Re: Premium Bonds

Postby Ratatouille » February 4th, 2019, 1:06 pm

I have one PB left - not that I had many anyway but this one is more valuable apparently than most of the prizes i might have got. It was one of the very very first issued and was bought for me by Uncle Ernest!!. I dealer told me to hang on to it because the peice of paper itself is worth quite a lot!!
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Re: Premium Bonds

Postby earthmaiden » February 4th, 2019, 1:16 pm

That's interesting Rats! The two I mentioned were bought for me by my grandmother when they first came out. I must make sure that my offspring know they could be valuable!

Thank you Seatallen and Suelle. I didn't know about the high end limit but that is encouraging and I might give it a try, I doubt interest rates will be going anywhere much anytime soon and as you say, it is tax free. Wouldn't it be nice to win the jackpot!
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Re: Premium Bonds

Postby Busybee » February 4th, 2019, 1:27 pm

My Mum and Dad had a little competition, mum invested £30k in premium bonds ( the limit at the time) and dad put his £30k in an ISA. Mums investment has consistently outperformed Dads. It’s now approaching the 15 year mark and it’s unusual if Mum goes two months without at least one win.

I feel they are a good bet at the moment when investment rates are so low, just keep an eye on rates and if they ever start to rise then reassess your situation.

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Re: Premium Bonds

Postby earthmaiden » February 4th, 2019, 2:35 pm

I have definitely made up my mind and will at least give it a go! Thank you dear people :hug: :hug:.
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Re: Premium Bonds

Postby PatsyMFagan » February 4th, 2019, 2:36 pm

My sister won £100,000 on the PB's ! …. I felt very much after that my chances of winning anything had dropped to almost zero. I think she had about £20k worth at the time .. I still have £5k's worth, but perhaps I should think about increasing my stake (and chances ;) ).
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Re: Premium Bonds

Postby Chinchilla_lady » February 4th, 2019, 2:48 pm

Mine too are proving a better bet than the current lack of interest rates.
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Re: Premium Bonds

Postby patpoyntz » February 4th, 2019, 4:00 pm

I have £5 from the very first issue....they have never won anything. But I have quite a few now...maybe half the maximum, and I win a small prize or two most months. I think I am getting more than the average interest rates. I like getting that winning letter through the post, though I am in no way a gambler! It’s also good to know that I can’t lose my money, and also it’s very easy to withdraw if I needed it for anything urgent.
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Re: Premium Bonds

Postby dennispc » February 4th, 2019, 4:25 pm

No experience, but recently I read about the downside of them not being transferable, if someone dies prematurely for example. No idea if it was right, but worth checking.
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Re: Premium Bonds

Postby earthmaiden » February 4th, 2019, 4:51 pm

What was the downside? I can't think of one unless the person has not made a will and left the value to the rightful person, then that will probably be the least of their problems anyway.

https://www.nsandi.com/what-do-i-do-if- ... r-has-died
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Re: Premium Bonds

Postby patpoyntz » February 4th, 2019, 5:08 pm

When my Father died, we were able to leave his bonds in, for, I think it was 6, months. They won a few small prizes!
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Re: Premium Bonds

Postby Suelle » February 4th, 2019, 5:24 pm

patpoyntz wrote:When my Father died, we were able to leave his bonds in, for, I think it was 6, months. They won a few small prizes!


I think it's a year. In the event of the holder's death it's no more difficult to deal with than any other bank account or form of savings - and a lot easier than some!
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Re: Premium Bonds

Postby WWordsworth » February 4th, 2019, 6:51 pm

J and I have about £20k each.
We both won £25 this month.
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Re: Premium Bonds

Postby KC2 » February 5th, 2019, 5:40 pm

They keep reducing the odds of winning the larger prizes, I believe (is that right? ie making it less likely that you'll win a big prize?), but making it more likely that you'll win a £25 prize. I wouldn't say we've done particularly well out of ours, probably just our inertia that's keeping them there! And each time you do win £25 it's nice to get more bonds rather than take the money. I think there's a calculator on the Martin Lewis site that will analyse how "successful" your own bonds are compared with what you should be able to expect.
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Re: Premium Bonds

Postby dennispc » February 6th, 2019, 3:31 pm

Thanks to you all for putting me straight. I went through the recycling box and found the article I'd mentioned :oops: I'd confused the PB bond bit with three year senior rail card one :rolleyes: which has no rebate if unused.
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