Premium Bonds - Not a bean for months now!!!!
Discussion
Elderly said:
Alex Z said:
£250 on £42k this time. I might top up to the full amount soon.
Assuming that you've been paying your winnings back into Premium Bonds,once you've reached the maximum, you lose the valuable investment benefit of compounding.
Elderly said:
Alex Z said:
£250 on £42k this time. I might top up to the full amount soon.
Assuming that you've been paying your winnings back into Premium Bonds,once you've reached the maximum, you lose the valuable investment benefit of compounding.
The Leaper said:
Good luck.
I've had £10,000 since 2004 and so far total prize money is around £400. The worst investment I have ever made?
R.
Your money’s 100% safe, instant access and tax free winnings. Savings interest rates were on the floor for a lot of that time so why not stick it in PBs for the excitement of checking the monthly draw…?I've had £10,000 since 2004 and so far total prize money is around £400. The worst investment I have ever made?
R.
Another way of looking at it is if you’d bought £10 of lottery tickets a week since 2004 that money’s gone forever whilst you can still cash your initial stake in - though reduced by inflation.
funinhounslow said:
The Leaper said:
Good luck.
I've had £10,000 since 2004 and so far total prize money is around £400. The worst investment I have ever made?
R.
Your money’s 100% safe, instant access and tax free winnings. Savings interest rates were on the floor for a lot of that time so why not stick it in PBs for the excitement of checking the monthly draw…?I've had £10,000 since 2004 and so far total prize money is around £400. The worst investment I have ever made?
R.
Another way of looking at it is if you’d bought £10 of lottery tickets a week since 2004 that money’s gone forever whilst you can still cash your initial stake in - though reduced by inflation.
R.
funinhounslow said:
The Leaper said:
Good luck.
I've had £10,000 since 2004 and so far total prize money is around £400. The worst investment I have ever made?
R.
Your money’s 100% safe, instant access and tax free winnings. Savings interest rates were on the floor for a lot of that time so why not stick it in PBs for the excitement of checking the monthly draw…?I've had £10,000 since 2004 and so far total prize money is around £400. The worst investment I have ever made?
R.
Another way of looking at it is if you’d bought £10 of lottery tickets a week since 2004 that money’s gone forever whilst you can still cash your initial stake in - though reduced by inflation.
Its cost OP quite a bit of money when a simple world index fund or S&P500 fund would have returned them significant gains on that money.
Saying that, it makes sense if OP has maxed their ISA and pension contributions every year, aswell as them being an additional rate tax payer, but I'd rather take a salary sacrifice on something that's actually going to bring me some happiness, a new car for example, than have my money sitting there doing sweet fanny Adam.
rb26 said:
funinhounslow said:
The Leaper said:
Good luck.
I've had £10,000 since 2004 and so far total prize money is around £400. The worst investment I have ever made?
R.
Your money’s 100% safe, instant access and tax free winnings. Savings interest rates were on the floor for a lot of that time so why not stick it in PBs for the excitement of checking the monthly draw…?I've had £10,000 since 2004 and so far total prize money is around £400. The worst investment I have ever made?
R.
Another way of looking at it is if you’d bought £10 of lottery tickets a week since 2004 that money’s gone forever whilst you can still cash your initial stake in - though reduced by inflation.
Its cost OP quite a bit of money when a simple world index fund or S&P500 fund would have returned them significant gains on that money.
Saying that, it makes sense if OP has maxed their ISA and pension contributions every year, aswell as them being an additional rate tax payer, but I'd rather take a salary sacrifice on something that's actually going to bring me some happiness, a new car for example, than have my money sitting there doing sweet fanny Adam.
Shares in a SIPP/ISA aren’t really risk free or instant access.
I have a SIPP and ISA for long term savings but where to put an “emergency fund” that I might need at short notice. When savings accounts were paying <0.5% why not stick them in PBs - the opportunity cost isn’t that great.
Now accounts are paying a lot more PBs are trickier to justify but like I said tax free winnings and a bit of a risk free flutter are advantages.
A new car isn’t really comparable - I wouldn’t be happy flogging my car if my boiler needed replacing…
Edited by funinhounslow on Sunday 3rd March 16:53
funinhounslow said:
rb26 said:
funinhounslow said:
The Leaper said:
Good luck.
I've had £10,000 since 2004 and so far total prize money is around £400. The worst investment I have ever made?
R.
Your money’s 100% safe, instant access and tax free winnings. Savings interest rates were on the floor for a lot of that time so why not stick it in PBs for the excitement of checking the monthly draw…?I've had £10,000 since 2004 and so far total prize money is around £400. The worst investment I have ever made?
R.
Another way of looking at it is if you’d bought £10 of lottery tickets a week since 2004 that money’s gone forever whilst you can still cash your initial stake in - though reduced by inflation.
Its cost OP quite a bit of money when a simple world index fund or S&P500 fund would have returned them significant gains on that money.
Saying that, it makes sense if OP has maxed their ISA and pension contributions every year, aswell as them being an additional rate tax payer, but I'd rather take a salary sacrifice on something that's actually going to bring me some happiness, a new car for example, than have my money sitting there doing sweet fanny Adam.
Shares in a SIPP/ISA aren’t really risk free or instant access.
I have a SIPP and ISA for long term savings but where to put an “emergency fund” that I might need at short notice. When savings accounts were paying <0.5% why not stick them in PBs - the opportunity cost isn’t that great.
Now accounts are paying a lot more PBs are trickier to justify but like I said tax free winnings and a bit of a risk free flutter are advantages.
A new car isn’t really comparable - I wouldn’t be happy flogging my car if my boiler needed replacing…
Edited by funinhounslow on Sunday 3rd March 16:53
If you buy and hold index funds for more than 10 years, you are almost guaranteed not to lose money. If you hold money in cash ISAs or premium bonds, you are almost certainly going to lose out to inflation, at best you'll have not moved at all.
I can liquidate my S&S isa in less than a week if I'd like. The truth is, premium bonds are a terrible investment. Saying that, I do buy £25 a month as a punt. Its my risk free gambling.
I would never hold any significant money into them if I hadn't already maxed out my ISA or pension contributions for the year or if I met the additional tax paying threshold.
People's understanding of risk, is generally very wrong. Which is why many more people put their money into this than they do into their pensions or a S&S ISA
They’re a good place for top rate tax payers to keep their safety net - that’s all I use it for. I could lose my job tomorrow and potentially totally drawing into investments at various points over the last few years would have either been OK or really not great. But I can get cash from PB very quickly with no risk at all.
If you have a tax free savings allowance I’d imagine it makes more sense to use that before PB’s.
You are right in the main that people are a bit silly and hold too much cash but you never quite know - £75k for me is about a year of day to day living for the essentials - could be that many others here have the same idea. £200k is a bit mad though.
If you have a tax free savings allowance I’d imagine it makes more sense to use that before PB’s.
You are right in the main that people are a bit silly and hold too much cash but you never quite know - £75k for me is about a year of day to day living for the essentials - could be that many others here have the same idea. £200k is a bit mad though.
As above, PBs are not an investment and should not be considered one. They are a tool, which can be used by individuals.
I have investments in equities which sorts that out. PB's allows me to save some accessable cash, whilst having not tax on the returns. I personally use the pot as a rainy day fund, and towards a lump sum off the mortgage on renewal. My average return from PB's is higher than my mortgage interest rate, so it works well for me.
By the time I have a few grand in personal and joint savings, it doesn't leave much leeway before paying 40% tax on additional interest.
It's all part of having a diverse approach in my opinion.
I have investments in equities which sorts that out. PB's allows me to save some accessable cash, whilst having not tax on the returns. I personally use the pot as a rainy day fund, and towards a lump sum off the mortgage on renewal. My average return from PB's is higher than my mortgage interest rate, so it works well for me.
By the time I have a few grand in personal and joint savings, it doesn't leave much leeway before paying 40% tax on additional interest.
It's all part of having a diverse approach in my opinion.
Gassing Station | Finance | Top of Page | What's New | My Stuff