Just noting that our return has been consistently over 1% over a few years, but gradually reducing each year (presumably in line with the reduced pay outs).
I suspect that with larger holdings you tend towards the percentage payment rate declared for the prizes, but with small holdings you go large or nothing.
Cheers
Dave R
I had £25 this month, making £425 for his year which works out at 1.12%. Nothing in October or November though.
Next year will be interesting.
I had 12.5% in 1998 with a £500, £100 and few £50's then nothing at all in 1999.
Unless you are prepared to invest in global trackers or investment trusts/funds like Baillie Gifford, Alliance Trust, Fundsmith, Lindsell Train etc then you may as well stick with PB's for a couple of years, but the moment inflation looks like taking off, give more thought to something with inflation protection.
The National Counties Building Society has only one branch in Epsom and it does a windfall bond where you get some interest and the chance of winning something too. So a cross between a deposit account and a premium bond. No £1 million prizes though.
Because there is no shortage of buyers for UK gilts, such that they are trading well above 'par'. 10-year gilts are yielding about 0.2% at the moment. If you buy then now and hold to redemption you will pay far more than £100 per 'unit' but in 10 years time you will only get £100 back but the interest over the period will give an overall return of 0.2%.
Indexed linked gilts bought now and held to redemption will give an absolute loss even after interest. You only buy those if you think interest rates could go lower (??) and so push their daily market price up to more than what you paid.
If inflation takes off (or there are suspicions of) then gilt prices will drop like a stone.
The premium bond prize fund is based on UK gilt yields. If they reduce the nominal prize fund then the number of prizes drops. Personally I think one of the £1 million prizes should be dropped and more £25 and £50 prizes handed out.
March was the time to do that, or after the initial dead cat bounce in June, stock markets drifted down until about the end of OCtober.
Some things didn't drop in MArch or if they did they bounced back. My Halma shares were barely affected, while my Alliance Trust and Scottish Mortgage IT shares dropped a lot but then powered back up to new heights. SMT were £4.80 in April 2019, but they have a big holding in Tesla and the people shorting Tesla got their fingers burnt to a cinder as 2019 and 2020 progressed. SMT now up to £11 because of their huge holding in Amazon and Tesla. The Alliance Trust after hitting £8.80 in Feb 2020 are now up higher than that. They have a big bias to US stocks.
when government pour money into th system commodities and global equities (and property) are the place to be in, not deposits.
The £2 bond that I bought in December 1965 won £25 in 2014.
I think £2 in 1965 would buy the same number of wagon-wheels as £25 would in 2014, so I just got my money back :-(
How long have you held them ?. I have a suspicion that purchases of large blocks like £10K+ get a reliable stream of prizes for 2 years then they seem to fizzle out. That's my experience.
You might win £1 million but you WILL get your money back (*) into your back account within 3 days if you register online and use online for purchases and redemptions. That was my experience in 2019, but this year there have been delays as all the stupid 'rate tarts' try to rush for the exit door after the interest rate cut. Most of these people also still use paper forms and snail mail I suspect.
(*) minus inflation. :-(
+1
My returns have pretty well followed the return on 10-year gilts,
*except* for 1998 when I made 12.5% on £26K, but then the next year I won no prizes at all.
Ditto. I had 7 in July, one in august nothing in October and November.
I haven't had a bigger prize than £25 since 2009.
Think of it as a lottery ticket - but you can get your money back.
Martin Lewis covered this last week. You can find past broadcasts on catch up.
Strange you should say that. It was also my feeling quite a few years ago so I cashed them in. But I've re-invested recently, and it doesn't seem to have happened second time around. The £25's are dribbling in steadily, if slowly.
hundred poinds...I'll take that
plus you still have your £2 investment
Possibly because the number of lower prizes is dependant on the size of the overall prize fund. The lowest prize is £25 so with a high interest rate for the whole fund = more £25 prizes. Lower interest rate on whole fund = fewer £25 prizes. Since the financial crash just over a decade ago interest rates have generally fallen.
Selling and then immediately buying again and you lose out because the bonds are not in the prize draw until held for a full calendar month after purchase. You could buy a bond the day after a draw and it will not eligible until the draw 8 weeks later.
In some cases N&I cut the interest rates from around 1+% to zero (0.01%) which is a sign that they want people to withdraw money - possibly in the hope it will be spent to boost the economy. It seems that the Government after telling us for years that we are not saving enough are now worried that we are saving too much during this Covid 19 year.
From reports I've heard it's the electronic means of closing accounts (web interface) that is repeatedly falling over and not helped with the support phone lines not being answered.
I thought PBs have a tax free prize rate of 1%
Might be of interest:
+1
Yes, split one of the £1m prizes into smaller units. Add another £100k and some more £50k. They'd spread a bit more happiness around that way. Here's this month's range of prizes
When the BoE cut base rate back in March, NS&I cancelled a previously announced cut to the Direct Saver rate of 1%. You can save £1 million in this account, and well-heeled, and forward thinking people will have sold all their equities and funds in jan/early feb and piled into a very safe deposit account.
A lot of this group will already have gone back into equities and funds anyway. It's the ones who insist on using paper forms who caused the massive logjam recently, and there are clearly limits to how fast you can process an online withdrawal with all the security checks behind the scenes, even if they too are electronic.
THis cut was announced ages ago, so why did people wait until the last moment ?.
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