Reply to: I'm a 'Winner'

[ChimpMaster]

Ummmmmm 30k is the max personal allowance

[MrRobin]

All of these National Savings carp things are not really tax free because stinking Brownstuff reduced the rate to claw some of it back.

This is true. The total prize fund for a month is one twelth of the rate specified on the site - currently 4%. A quick bit of maths using the estimated prize fund of £112.5M in March 08 suggests there are about 35 billion bonds in issue.

[xoggoth]

All of these National Savings crap things are not really tax free because stinking Brownstuff reduced the rate to claw some of it back.

[MrRobin]

hello old thread

Oh yeah, I've only just noticed the dates...... hmm!

[MrRobin]

Premium bonds are OK if you don't expect a guaranteed return but enjoy the [very remote] possibilty of winning big without any risk to your investment.

I had £10k in PBs for a while and thought it was a good option since I knew I was going to need the cash at some point in the near future and didn't want it tied up in a notice account. Ended up with £350 in winnings over about 10 months. Worked out pretty similar to sticking the cash into an instant savings account except you don't have to pay interest on winnings.

Denny, your builder is talking crap since the maximum bonds you can have is 30,000

[RandyW]

'Invested' £6k in Premium Bonds in Sept 2005. I have just received my first winners letter - I have won £50.

Does not fill me with a warm and fuzzy feeling. Am I luckless or a stupid investor ?

Both.

[MrsGoof]

reserect an old thread

hello old thread

[Bagpuss]

They are an Ok investment for a higher rate tax payer, with an element of excitement.

[SallyAnne]

Heavy night on the pop again SA?

Why? Was I being dense again? Its too hard to concentrate with all this merriment going on
The sherry is open and Xmas fumes are getting to me!

[Denny]

If you had loads of them then, statistically speaking, you would have an expected rate of return of 3.55% dropping to 3.4% on the 1st Jan. National Savings Website

The max holding is only £30, 000 by the way.

Perhaps I got the figure wrong then, but he maxed it out anyway. That bit was correct.

[Buffoon]

My ex-builder told me that he knew of someone who maxed out his PB allowance by having £100K worth. He regularly gets a good return on his winnings......apparently.

If you had loads of them then, statistically speaking, you would have an expected rate of return of 3.55% dropping to 3.4% on the 1st Jan. National Savings Website

The max holding is only £30, 000 by the way.

[Denny]

My ex-builder told me that he knew of someone who maxed out his PB allowance by having £100K worth. He regularly gets a good return on his winnings......apparently.

[ChimpMaster]

Yes but they sell it on the fact that all income is tax free and that there is a [very] small chance of winning a much bigger prize.

[MarillionFan]

Nah. You two are having a laugh.

Premium bonds are a little bit of fun. Its a lottery whereby you actually return a little cash. Doing the lottery is stupid, doing premium bonds a little fun.

But then again boys when you're as poor as you two sticking a fiver in a savings account seems like a good idea.

Now where did I park my wallet?

[Buffoon]

... premium bonds are a form of investment with a stochastic rate of return. You are not a winner, you are merely getting some return. However, the return from premium bonds (through winnings) is on average less than that from risk-free investments even though you are taking on risk...

He's right you know. I was going to say the same thing but Mr Omega beat me to it. The bit about being worse than the RFR is very true and getting worse from next year the nominal rate on premium bonds goes down to 3.4% in the face of further rises in bank rate. Something else that el Gordo forgot to make public.