PREMIUM BONDS: £50k, 3 people, 1 year - WHO WILL WIN?
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- Опубликовано: 1 июн 2024
- Even though there's no guarantee in what you could win with Premium Bonds (if anything), people hope they might get lucky and net big prizes.
To get an idea of how that might pan out, Andy asked three people with the maximum £50,000 saved what they won in a year. Though your own situation will differ, it's a great way to understand how they work.
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#premiumbonds #saving #moneysaving
TIMESTAMPS
00:00 How much could you win with Premium Bonds?
02:27 Saver one's results
03:26 Saver two's results
04:48 Saver three's results
06:50 How they compare to average prize draw rate
08:05 Premium Bonds vs savings
08:55 How your tax bracket affects your returns
10:39 How Premium Bonds compare to ISAs and easy access
12:47 Are Premium Bonds worth it if you don't have £50K to invest?
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A B O U T A N D Y
Andy Webb is a money blogger and journalist. He runs the award-winning website Be Clever With Your Cash, hosts the Cash Chats podcast, presented Channel 5’s Shop Smart Save Money and writes every month for Reader's Digest. Andy also founded the community ukmoneybloggers.com.
DISCLAIMER
Content in these videos does not constitute regulated financial advice. Any offers mentioned were correct at the time of filming.
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My sister started Premium Bonds a year ago with £10k and within 6 months she'd won a £5k prize, as well as a few small ones. So, luck of the draw but it's worked for her and I'm a tad jealous;)
That’s a lovely return!
Thanks for sharing those results. Very interesting. I also share my premium bond results month by month. For the months you mentioned Jun 23 to May 24 the total was £2,700. Keep up the good work Andy.
Not bad at all! Beats the easy access account
Nice 👌
Thanks for doing the maths, Andy. Figured I was about breaking even but it seems I'm a little up so far. 7 draws = £2425 @ £50k = 4.9% (I'm a 20% tax payer)
I enjoy the thrill of opening the NS&I app every month!!
Great video. Love PB's. The thrill of seeing if you've won every month. Had my best month this month, with a single £500 win. I put all my wins into my ISA. It'll interesting to see how we get on.
It's the most frustrating 'investment'. My holding - £50k, my girlfriend - £30k, her mother - £10k. May's winnings, me - £100, girlfriend- £475, her mother - £1000. 😂
My partner had £5K stashed away for a couple of months while he was waiting to pay our window guy. He won twice, made about £250 on it before paying the invoice. I popped in £8K after a property sale. First month? Nothing 😂 I never was the lucky one out of the two of us!!
@Pentan797 the first month of a deposit you aren't entered into the draws.
I put 20k in a year ago I've reinvested my winnings. I made £1075 over 11 months and this months draw I had 3 wins £50, £100 & £1000. In a year I've made £2225. premium bond calculator: £750 with average luck, I've been extremely lucky beating that. I've had 1 or 2 months where I didn't win anything
I have been getting some awful results and have moved the majority of the money into savings. My avg was around 2%. My philosophy is if saving rates are low, then premium bonds give you the chance of some big wins, so why not, but is saving rates are higher then make your money work for you.
I’m with you there!
My parents bought £5 worth 40 iears ago NEVER won a thing, I won't be investing in them, it's all about how many you have. I'd rather have the interest in savings or stocks and shares.
Makes it useful that u don’t need to worry about paying any tax
I’ve got the full £50k. Last 6 months I’ve received
Dec: £100
Jan: £225
Feb: £325
Mar: £50
Apr: £100
£700 in 6 months. Bearing in mind I max my savings allowance already.
Extrapolating a 2.8% return. Regardless of tax status, that’s quite poor
@@reuben4364 it’s my contingency cash, so need to put it somewhere liquid. I already max out ISA and pension. Saving accounts already use tax free allowance
It’s worth noting that eventually chance becomes certainty given a large enough timescale, even winning the million would become fact, though you may have to hold the bonds for a few thousand years.
As you hold bonds for longer and longer you will find overall your money earned will come close to the average return. Some years up some down, you might even have a bad run for a few years and a good run for some more but over decades it will get close to average. That said the average is dependant on having a lot of bonds, and if you’re holding premium bonds for a long term investment there are other areas that will get you a much better return.
At 28 years of age and being an in theory “additional rate tax payer”, I put a significant amount to pension (10-25% in personal contributions, and then employer match on top) - especially now lifetime allowance has been lifted.
This allows me to bring down my taxable income into effectively being classed as a higher rate tax payer.
Personal savings allowance is maxed out by my emergency fund/additional savings sitting in 5% interest paying savings account and ISA allowance is maxed out in S&S for hopefully an earlier retirement !
I have parked my house deposit (£50k) in the premium bonds because (a) i thought I’d likely come out on top, when considering tax which would have otherwise been payable and (b) I like the security, as I’d be looking to buy in the next year.
In the last 7 draws, I’ve won a combined total of: £1,075. I’ve never not won anything, but have had a couple of months of £50 wins and the highest win I’ve had has been £400.
£1,500 for me across the year in question with the full holding. I have never won more than £250 in one month so hope to break that come the June draw 🤞🏻
We love PBs and the 4 of us in our household have them. Enjoy tracking the wins and sharing updates with family and friends who also hold PBs. We’re under no illusion that’s it’s all down to luck and we accept the fact that we lose out on guaranteed interest elsewhere to play each month. Last year (my first full year) I received 5.6% prize return on my holding so I was happy with that. Here’s hoping I beat that this year…
I will add that due to how we prioritise our finances we’d never fill an ISA in a year, so we add what we can to PBs in the hope of beating a basic ISA rate. We can also get to that money if we need it, of course.
Good to hear to did well
Thank you, do you have anything on pension savings specially for nhs and private
It's some element of fun
Another feature of Premium Bonds that most people don't know is that even if you have a large holding it takes a considerable time for you average return to approach the nominal prize rate. This is because there are a lot of small prizes and very few larger ones. So you don't win a large prize very often, and you need the larger prizes to get your average winnings up to the nominal rate. I have the full £50k and it took about 18 months for my return to get close to the nominal value. By the nominal value I mean 80% of the published prize rate (currently 4.4%) because the chance of winning any prizes larger than £1000 is so small that you can ignore them.
I love PBs! My avg. return since I started 6 months ago is 10% which is great! Keep posting their results, love your content btw.
Nice video 😊
Thanks
A histogram / bar chart of those results would make the differences easy to see. Maybe next month? My £50k investment was rubbish last year, only partially redeemed by one good (£825) month to 3%. This year Im getting rid as i need the money for some other things. Sold £20k after Jans draw Last entry August then i'll sell the rest. Of course i had my biggest win after i sold nearlly half lol £1100 but only £25 this month.
Hi put £40k in June last year & another £5k in at the end of march. I've won most months (£3,250)
Surely the missing variable here is how long each of the savers have held their premium bonds, as this massively influences the chance of winning?
The video represents a year of holding for each person and the amount returned in that year. It’s not a “lifetime” comparison just 12 months/draws.
I'm favoured, $22K every week! I can now give back to the locals in my community and also support God's work and the church. God bless America.
Yeah come to conclusion that it’s best to take your money out and put it in to a savings 100%
It’s a gamble that you don’t lose your money with better odds than the lottery.
Andy ,would it be wise to cash in broken up amounts that eventually add up to £50k then buy again with a full block of £50k, could this make any difference?
That would make absolutely no difference at all. You’d also lose a month’s draw by cashing out and buying in again. It’s a common argument in the PB Facebook group. All bonds have an equal chance so scattered or chunked it makes no difference to the chance of winning.
Premium bonds not worth it!
Got 50g in premium bonds so far this year and I’ve got about £175 in 5 months.
My view is buy Premium Bonds after filling my ISA each year to avoid the tax. Eventually I will get to 50k and use the winnings as retirement income.
I agree, I don’t think premium bonds should be seen as a primary savings account.
I use it to park money tax free, as my ISA allowance has been filled this year, if it hadn’t I’d probably have only some money in premium bonds and spread the rest over other savings accounts.
It’s just a way to park money and avoid tax on savings(for me personally)
Unusual - but this month my wife and I didn’t win a penny - we’ve each got £50k of p bonds… 😂
Just wonder
Same bond(stocks), same amount of money and same amount of time
Saver 1
300 pounds per month
Saver 2
75 pounds per week
Saver 3
9.4 pounds per day
For 10 years who will win?
Do you think they should increase the maximum amount of bonds you can have?
Not a good investment. Move to investment trusts.
Waste of time unless you have thousands on them you don't earn any interest either, a poor investment imo