Premium Bonds - Not a bean for months now!!!!
Discussion
okgo said:
Surely its all just a bit of fun? Does anyone rewlly care about getting an extra £100 of interest elsewhere? The amounts you can hold are fairly nominal I didn't think anyone is really using it as a serious investment vehicle?
Just buy lottery tickets with the interest from a savings account. At least then some goes to good causes.My O.H. had £25 prize letter today and commented that since she invested she'd had £3925 in prizes (all £25/50/100, no medium or big ones). Premium bonds (PB) have a place as 100% guaranteed, tax-free investments, albeit at a low interest rate, potentially attractive since NS&I withdrew their index-linked or fixed-interest tax-free certificates a few years ago (except for reinvestment at RPI+0.05%). The stock market or bonds held in ISAs can outstrip them for sure, but if you've got those already and are a higher rate taxpayer there may be a place for PB.
The argument given in earlier posts about the high and medium (£1M - £1k) prizes skewing the returns for most holders who only win (or don't win!) low value prizes doesn't really hold as 88% of the prize pot goes to the low value winners. Someone cleverer than me can calculate what difference that makes to the stated overall return of 1.35%, remembering the added value of tax relief at 40 or 45% for some taxpayers. I doubt people would be enthused by the prospect of no £1M or higher prizes but more prizes limited to £25 - why not go for some very boring alternative investments instead? The draw is that you are going to get a feeble rate of secure tax-free return and the miniscule possibility of £1M.
The argument given in earlier posts about the high and medium (£1M - £1k) prizes skewing the returns for most holders who only win (or don't win!) low value prizes doesn't really hold as 88% of the prize pot goes to the low value winners. Someone cleverer than me can calculate what difference that makes to the stated overall return of 1.35%, remembering the added value of tax relief at 40 or 45% for some taxpayers. I doubt people would be enthused by the prospect of no £1M or higher prizes but more prizes limited to £25 - why not go for some very boring alternative investments instead? The draw is that you are going to get a feeble rate of secure tax-free return and the miniscule possibility of £1M.
Grumfutock said:
Soon be draw time. I feel lucky this month!
Ummm I'm not so optimistic..July - I had a bumper month, a fist full of £25s and a £50. Which was the month they increased the pot allowance to £40K
August - I only bagged a Token £25 prize... also the same month they started raving about 2x million pound prizes!!.. but also slashed the amount of lower prizes available
Lets see what tomorrow brings...
...Come-on baby!! Daddy needs a new pair of everything!!
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