Are premium bonds worthless?
Premium bonds are one of the most popular saving products in the UK. However, Christine Toner questions how good they really are.
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I think the chance of winning a large prize is much better then a few extra quid that you get after tax (or not) in a high interest paying account.
There’s not many investments that give you a real chance of changing your life and this is one, you may not win a bean but at least you were in with a shot, what exactly is £0k going to do in terms of changing your life in an account these days! Even if you invest the minimum of £100 that’s still a chance of winning big money, I disagree with comments in this video and think current rates are so poor that this is definitely worth a ‘safe’ punt.
we have two blocks of £5000, which i know is quite a few but last year alone we won five £25 & one £100 this was more than we would get in interesti think!
At least you have a chance every month of winning something, not like the lottery when you have to keep paying out.
Real interest rates are negative. The government thinks by forcing people to spend money it will stimulate the economy. The fact that as a nations we are riddled with debt, and negative equity precludes this.
So anything that pays less than inflations, which if you eat and keep warm is nearer 10% is worthless.
Ergo Premium bonds, ISAs, bank and building society accounts are all losing money. While paper money retreats, gold and silver stand still, and therefore appear to advance.
Save your savings, buy physical gold and silver. Vote with your money, it is the only real vote you have left.
I have held £10 worth of premium bonds since 1964 when that was my weekly wage! I have never won anything.
We have the maximum amount of Premium Bonds and although when we first started we got lots of prizes, have not won anything in nearly 6 months so are now thinking of putting the money into NSI bonds for a year or so and see how the interest rates go.
Its just pure luck, if you have the money to not worry about then its a good thrill each month to see if you have won, but otherwise not. You pays your money and takes your choice.
If you have a mortgage and money to spare then the wisest thing to do is to pay the extra off your mortgage, think what you will save if, for example, you still have 10 to 20 years to run on your mortgage. It is the wisest thing to do with spare cash and is a no brainer really.
At the moment gold and silver are the only bets in town. BUT, and I capitalized it as it's a big one, you could lose some (but not all) of your money if they go down in value. However, that's as unlikely as I don't know what - but it ain't going to happen in the near future. So, as the last commentator said - vote with your pockets and buy physical gold and silver - they won't let you down all the time there's so much debt out there.
Don't forget the prizes!!! are tax free and as far as I know you don't have to declare on income tax returns an added bonus! Must admit when first bought a block for family and children won quite a lot but slowed down now and prize money has halved £50 is now £25 etc - we live in hope, better than the lottery at least money is being used (hopefully wisely by the government) rather than on strange lottery give aways.
My mother has £20k in bonds that have given her a return of between 3 and 5% over the past few years. All her money is tied up to pay for nursing care, but this is her one excitement. Each time a prize cheque turns up she is thrilled. Some months she wins nothing, others £50, but the return has definitely been better than her "high interest" account at HSBC for the past few years.
They may be worthless but they still pay me a better rate of return than one of my investments! That has been well into negative territory for the past four years and I doubt if it will improve much in the near future. My relatively small amount of bonds is actually performing better than most of my investments!
my son was given £500 worth of bonds and he won £25 in the first two months. thats more than the bank would have given him in a year, so at the moment quids in
I held the maximum of £30k for a number of years and the most i ever won in a year was £1600, about 6% return at the time when interest were 6.5%.But since interest rates fell and therefore the prize money from ernie the winnings reduced.so i cashed them in and put the dosh into isa's giving me a guaranteed 3.75% now tax free fixed and out of the interest i have a £5 punt on the lottery each week = £260 per year, best of both worlds and better odds on the lottery than premium bonds £1million prize which is trillions to one..
My mum swears that you should cash them in and buy new ones every so often to "refresh" your numbers...and she should know, she regularly wins £25s and £50s! I would say at least 3-4 a year!
We have won regular small amounts every month , beating
the interest from banks . if you want risk free investments , the interest rates are very low . Not even long term bonds will not beat the inflation , over 5% at the moment . It is always
interesting to check on line if we have won , and the money is save . Vic
I have the maximum holiding and average winnings of £25 per month.Months of December and January, not a bean.
You have to remember that Moneywise is the mouthpiece of the investment industry and as such, the very popular Premium Bond is a serious competitor. Thus we have consistant negative comment. Most people are aware of the odds and still prefer to put their money in PBs because there is one thing that regular saving vehicles can never give you - the chance of winning a large prize at the maximum cost of inflation.
I have maximum holding. 3 out of the last six months have not won a penny. I normally average about £25 a month.
I have the maximum holding (isn't it about time they increased that?) and win consistently small sums amounting to about 1.25% of capital invested. And there's always the chance of something bigger ... A few years ago I won 25k! I think you also have to remember its not always just the payouts on investments but how safe they are (partic these days). NS&I couldn't be safer. And that's a relief.