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Premium Bond Odds On A 30k Holding?


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#1 markyh

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Posted 03 May 2007 - 11:44 AM

Hi,

Had the carpet cleaners in today in the final preperations for STR. final DIY this weekend and then estate agents in next week to get it on the Market before HIPS. All going well and based on my joining semi that was put on at 180k in Oct 06 and sold within a month and was completed in Jan 07 for 176k I will have 100k+ equity to invest after I pay all the selling fees from the equity.

I had various amounts around 1k to 9k in premium bonds in the last 18 months for a wedding fund and we won at least 700 off them (auto reinvested each time) which I thought was quite good, now i'm down to 10 im getting zilch the last few months (wedding was 1/3/07).

So I was thinking of putting 30k of my equity into premium bonds as when I check every month I would say 75% of the big prizes 5k to 1m are won by holders with 10k to 30k holdings.

I know on the NS&I website it says each bond has a 24000 to 1 chance of winning a prize so I tried to work that out in excel. My understanding is that every 1 bond is drawn for every prize. But if it wins on more than one prize it is allocated to the highest only? So it a 1 bond is drawn and wins 50, 500 and 10k you will get the 10k prize only.

So I looked at the total estimated amount of prize draws listed for Julys draw, 1,474,310 (1.47 million approx). So assuming you had a 30000 holding you would have 30000 x 1474310 chances of winning a prize? This is 44,229,300,000 chances? Am I correct that this is 44 billion, 229 million, 300 thousand chances?

So, If you divide that 44 billion + by the Goverment 24000 to 1 odds, you have 1,842,887 (1.84 million) realistic chances of winning at least 50 each month?

This seems a good punt to me. I should think that you are virtually gaurenteed 50 a month winnings on 30k holding which is only 2% p/a nett i know but it must be worth it for the gamble as only a few medium wins will get you near the best taxable savings of about 4.7% net p/a (on basix rate tax)

Can someone please explain if my figures are roughly right as I am guessing about the odds. If I am wrong can they give the real odds on a 30k holding? Also, are there any 30k PB holders here who can confirm you have a high chance of winning at 50+ prize every month?


Thanks


Mark

Edited by markyh, 03 May 2007 - 11:58 AM.


#2 Casual Observer

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Posted 03 May 2007 - 12:00 PM

Hi,

Had the carpet cleaners in today in the final preperations for STR. final DIY this weekend and then estate agents in next week to get it on the Market before HIPS. All going well and based on my joining semi that was put on at 180k in Oct 06 and sold within a month and was completed in Jan 07 for 176k I will have 100k+ equity to invest after I pay all the selling fees from the equity.

I had variuous amounts around 1k to 9k in premium bonds in the last 18 months for a wedding fund and we won at least 700 off them (auto reinvested each time) which I thought was quite good, now i'm down to 10 im getting zilch the last few months (wedding was 1/3/07).

So I was thinking of putting 30k of my equity into premium bonds as when I check every month I would say 75% of the big prizes 5k to 1m are won by holders with 10k to 30k holdings.

I know on the NS&I website it says each bond has a 24000 to 1 chance of winning a prize so I tried to work that out in excel. My understanding is that every 1 bond is drawn for every prize. But if it wins on more than one prize it is allocated to the highest only? So it a 1 bond is drawn and wins 50, 500 and 10k you will get the 10k prize only.

So I looked at the total estimated amount of prize draws listed for Julys draw, 1,474,310 (1.47 million approx). So assuming you had a 30000 holding you would have 30000 x 1474310 chances of winning a prize? This is 44,229,300,000 chances? Am I correct that this is 44 billion, 229 million, 300 thousand chances?

So, If you divide that 44 billion + by the Goverment 24000 to 1 odds, you have 1,842,887 (1.84 million) realistic chances of winning at least 50 each month?

This seems a good punt to me. I should think that you are virtually gaurenteed 50 a month winnings on 30k holding which is only 2% p/a nett i know but it must be worth it for the gamble as only a few medium wins will get you near the best taxable savings of about 4.7% net p/a (on basix rate tax)

Can someone please explain if my figures are roughly right as I am guessing about the odds. If I am wrong can the give the real odds on a 330k holding? Also, are there any 30k PB holders here who can confirm you have a high chance of winning at 50+ prize every month?
Thanks
Mark


There's no guarantee about it, however the statistical odds of each bond winning a prize is 1 in 24000. So if you have the full complement, then statistically you'd expect to win around 15 prizes a year.

The prize fund is derived from their target return rate, which is currently 3.6%. Prizes are tax free. If a 1 Bond unit is drawn more than once in a draw it will be allocated the highest prize for which it is drawn

Last year I did better than average and my wife and I, who each have the maximum holding, returned 5.4%.

I won 100 this morning (you can check whether you've won on-line)

The real fun is the chance of winning the big prizes, althought the biggest I've ever won is 1,000.

Edited by Casual Observer, 03 May 2007 - 12:03 PM.


#3 pootle

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Posted 03 May 2007 - 12:05 PM

I can't tell you what the odds are but if you have 30k invested and you win 50/month that only gives you a return of 2%. You would need to be winning at least 100/month to make it worthwhile.
Stultior stulto fuisti, qui tabellis crederes!

Do not believe in anything simply because you have heard it. Do not believe in anything simply because it is spoken and rumoured by many. Do not believe in anything simply because it is found written in your religious books. Do not believe in anything merely on the authority of your teachers and elders. Do not believe in traditions because they have been handed down for many generations. But after observation and analysis, when you find that anything agrees with reason and is conducive to the good and benefit of one and all, then accept it and live up to it.

#4 nickswift

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Posted 03 May 2007 - 12:09 PM

I have the maximum amout and here are my winnings over the last 6 months.

today - 500 + 50
April - 50 50
March - 100
Feb - Nothing
Jan - 50
Dec - 50

I was going to cash them a couple of months ago, but I heard they were doing another bonus month of 5 x 1m prizes in June (although you might be too late for this one?) so I thought I'd hang on to them for a few more draws - so I was glad that I did today. I think it is now beyond what it would have been if i stuck it in a 5% interest account.

Money saving expert has a big thread on PBs.

#5 Casual Observer

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Posted 03 May 2007 - 12:11 PM

I have the maximum amout and here are my winnings over the last 6 months.

today - 500 + 50
April - 50 50
March - 100
Feb - Nothing
Jan - 50
Dec - 50

I was going to cash them a couple of months ago, but I heard they were doing another bonus month of 5 x 1m prizes in June (although you might be too late for this one?) so I thought I'd hang on to them for a few more draws - so I was glad that I did today. I think it is now beyond what it would have been if i stuck it in a 5% interest account.

Money saving expert has a big thread on PBs.

Congrats on today's win!

#6 Harry in Germany

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Posted 03 May 2007 - 12:12 PM

I have had the maximum holding for a couple of years and I win prizes almost every month (not a bean this month though). I have won a 5,000 prize before so over the course of the investment I've had a very good return so far.

Edited by Harry in Germany, 03 May 2007 - 12:13 PM.

Our chav class is sitting pretty. They take credit and don't repay. They break the law and don't get punished. They drive without tax or insurance. They breed with no thought of how they will support their offspring. They get housed and fed whatever they do. They lead lives dominated by TV, booze, "rights" and petty feuds with other chavs.

They are perpetual childen of a paternal state.


#7 markyh

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Posted 03 May 2007 - 12:13 PM

There's no guarantee about it, however the statistical odds of each bond winning a prize is 1 in 24000. So if you have the full complement, then statistically you'd expect to win around 15 prizes a year.

The prize fund is derived from their target return rate, which is currently 3.6%. Prizes are tax free. If a 1 Bond unit is drawn more than once in a draw it will be allocated the highest prize for which it is drawn

Last year I did better than average and my wife and I, who each have the maximum holding, returned 5.4%.

I won 100 this morning (you can check whether you've won on-line)

The real fun is the chance of winning the big prizes, althought the biggest I've ever won is 1,000.


Thanks CO , I did think my figures seemed a bit fantastic. Still I think I will do it as you say i like the idea of having 60000 attempts at winning 1m every month, and 1/2 million chances of winning 100k whilst still keeping your inital stake! Still I believe I am correct that you have approx 44 Billion "attempts" to be picked at random by "Ernie" to win a prize each month on a 30k holding whatever the odds!

Like it!

M

#8 DaggaDagga

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Posted 03 May 2007 - 12:14 PM

The majority of people will get less than 3.6%, and a few will get much more.

It's the equivalent of putting your bank interest, tax-free in a lottery that pays out 100%. Most will lose out, some will gain wads of cash.

I had some once, and they are good fun. In my opinion there aren't enough big prizes though - the novelty of winning yet another 50 soon gets boring!

#9 Casual Observer

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Posted 03 May 2007 - 12:15 PM

I have had a 30k holding for a couple of years and I win prizes almost every month (not a bean this month though). I have won a 5,000 prize before so over the course of the investment I've had a very good return so far.


I keep a tab on percentage returns. Some years I've beaten the target, some years I've been below. On average I'm probably no better or worse off than in a BS over the years.

But it's that chance of winning the big one that keeps me in, just the fun of gambling without losing your stake I suppose.

#10 Boughtin95

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Posted 03 May 2007 - 12:16 PM

I've held the 30k max in premium bonds for a couple of years now, the returns haven't been great but neither have interest rates.

I won 800 in 2006.

So far in 2007, excluding any I may win in May, I've won 600.

The small wins are good to see, as I don't need to use the cash for anything else atm, I'll keep the bonds and hope for one of the large prizes.

#11 Son of Taeper

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Posted 03 May 2007 - 12:17 PM

We had two lots of max holdings and won on average about 50 per week each. I suppose its fair to say that, while the odds per bond remain stable, it is not as good a return as you might get elsewhere. Having said that, you do get a guaranteed return.
The views expressed in my posts are my own based upon what I read on other information supplied by other HPC members.
These should not be used a a definitive answer to any posts I attempt to answer.

#12 Bear Monger

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Posted 03 May 2007 - 12:19 PM

I have the full allowance too and here are my stats:

Prize value () Winning month
50 May
50 May
500 March
50 March
50 March
50 February
100 January
100 January
50 January
50 December
50 December

For me, the excitement of hitting a big win every month is a real bonus that is difficult to factor into any interest rate comparison - although I seem to be doing ok there too.

#13 Casual Observer

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Posted 03 May 2007 - 12:20 PM

Hello,

No i disagree.

You need to be pulling in more than 100 a month to make this 'worth your while'.

100 per month only 'gives' you 4%. This is a crap return, especially when you take in to account High St interest accounts @ 6%. Not to mention the 'money supply' argument as well as your own personal inflation rate!

With that aside we did have the maximum in there for three, but have since reduced it to one person holding the maximum. Will consider binning it after June's draw. (In reality should do it now, but I'm as greedy as the next man, but am really stupid when you consider the odds!) :blink:

The 4% would be tax free, so it would compare favourably to the net return from a BS.

After you've used up your ISA allowance of course

#14 swindler

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Posted 03 May 2007 - 12:21 PM

I wouldn't get caught up about a single pound bons winning twice in the same month. The odds don't even fit on a calculator. I have 12100 of PBs, I got my 1st 300 from a part time job at 16. I'd say at least 3k of my current holding is auto-reinvested 50 and 100 prizes. The prize fund is currently 3.60% of the total number annually, paid tax free and off your self-certification.


If you are a higher rate taxpayer they are compelling.

#15 jdc

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Posted 03 May 2007 - 12:22 PM

They're not good as a rational investment unless you are a higher-rate taxpayer. I have them largely because I don't factor interest into my financial plans, and it's not big enough to need, so I effectively am doing what the poster above said - spending my interest on a 100% payout lottery.

That said, I haven't had a sniff of a prize yet this year (hold just under 10k, haven't checked the May draw) and my father seems to win every month, often twice.




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