Are premium bonds worthless?

Your Comments

Premium Bonds are much like any other Lottery or game of chance.
To decide whether or not to "invest" in them you simply have to understand the facts and the risks involved.
For a basic rate taxpayer, for every £1000 "invested" in PB's, the NET loss of interest (or return) is currently approximately £25 a year (or £20 a year for a Higher Rate tax payer) - when compared to a Building Society deposit account. This could be regarded as buying just two £1 Lottery tickets every month.
With the governments continuing policy of money printing (quantitive easing) and desperately trying to keep interest rates low, £1,000 today will only likely be "worth" around £950 in a years time.
So, if you leave your £1,000 in a Building Society your "real" worth in a years time will be less than when you started! i.e. approx £950 PLUS £25 interest.
If you "invest" that same £1,000 in PB's, and you don't win anything, your "worth" will be £950.
In either of the above scenarios you are effectively losing money, but at least with the PB option you stand a chance of actually improving your net worth, even if it does have the potential of losing you a bit more than a "safe" deposit account.
You pays your money and you takes your chance.

We've held £29,000 for 12 years
Biggest annual win £1,300 in 2008 but now average only £475 per annum since prize amount has been lowered to £25.
Still theres always the chance you could have a big win and its very easy to cash them in if you want your money.Wish they wouldn't waste money sending the forms and envelopes with the cheques, asking you if you would like to reinvest your winnings. I'm sure everyone is capable of requesting a form if they wish to do this.

We have the maximum amount invested and had a £1000 win in the past. Usually win £25 most months, so return is about the same as many savings accounts. But there is always the chance of a bigger win, which you don't get in a savings account!

Hi,When my son was born in 1979 , he was given £35 in premium bonds friends bought him, he has  tried to get informaton on how to cash them as they have never given any reward,however even though he has the bonds he is unable to cash them.
I think they are a total rip off.
Do you you how to cash them in.
Regards john.