Premium Bonds

Quite right.............£8k on hookers and blow, and just let him waste the rest

So last month i asked a few questions on the random nature of bond wins, thanks to those who put me straight on the random stuff. This month was even better than last month for Mrs aju with my £25 holding, to be expected though, adding nothing to our funds.

Although not really indicative of anything in particular she had 
£100 & £25 from her £20,000 Block
£50   from £6,000 Block
£25   from £25 Block from July 2022
£25   from £5,000 Block

Last month she got £100 & £25

Since start of the year she has had about 1.5% return for the year ignoring the wins being reinvested adding in the returns its about 1.47%. (This a rough approximation though.) 

Whilst it looks not that great relative to our returns in other savings @ higher rates and Mrs Aju does not actually pay tax anyway at present come next May when she gets the state pension we will need to reconsider things. Who knows what rates will be then though.

It's quite tempting. Despite their recent increased rate, PBs still aren't particularly attractive to basic rate taxpayers.  I calculated recently that the extra payout from cashing our two holdings into a fixed rate bond, even after tax, was equivalent to "doing a travolta" (winning a £10k prize ) every 5-6 years!

Keeping the numbers simple...
100k at 2% (the current realistic return from PBs, discounting the massive wins) = 2k pa.
100k at 4% (5% bond after tax) = 4k pa.  

Equivalent to an extra £10k prize every 5 years.  

If NS&I don't increase their rates soon, I'll be joining you. 

Roll on January       www.thisismoney.co.uk/money/saving/article-11532863/Premium-Bonds-prizes-NS-adds-extra-80million-pot.html

Bit late dangling a bigger carrot for me now.
I've went for a fixed rate bond. Guaranteed rather than relying on my luck ... which is not very !

My returns were historically poor.
Maybe good for high tax rate payers who have maxed their isa and sips.

The new full table is available from

    www.nsandi.com/get-to-know-us/monthly-prize-allocation

and it shows overall that last month there was 3,507,581 £25 prizes compared to 2,621,112 quite a drop of 886,469 £25 prizes but there are increases across all the others.

We'll see how Mrs Aju does over the next few months, she hasn't done too badly over the last 18 months or so.

Edit: I see I should have read the mail article it had the table in it. I do prefer to go to the horses mouth though - that's my excuse and i'm sticking to it ... 

The way to look at premium bonds is your capital is 100% safe but you are gambering your interest.

www.moneysavingexpert.com/savings/premium-bonds/


Premium Bond prize rate to rise from 2.2% to 3% in January


Along with some other useful information


However while the rate of wins may be 3% the average investor will get less as this is skewed by the large wins so in stats terms it is the average vs the median.

take a look at the calculator and put in your investment

premiumbondsprizes.com/detailed#10000

For £10,000 the median is 2.25%

The median will be what the largest number of people get in this case with £10,000 £225 pa but you may just get lucky and get one of those big wins.

3% tax free seems a good rate for taxpayers especially those with 40% and above, also may keep you from going up a band and lose child benefits etc. Another benefit is you don't have to put this on the Self Assessment so one less thing to keep track off.