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You Can Tell The Economy Is In Danger

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Guest absolutezero

Adverts on the telly for National Savings Premuim Bonds.

National Savings? That's where the Government borrow money from.

Surely they don't want people to deposit cash for them to borrow (what with the stable economy we have....)

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Adverts on the telly for National Savings Premuim Bonds.

National Savings?  That's where the Government borrow money from.

Surely they don't want people to deposit cash for them to borrow (what with the stable economy we have....)

yeah I saw that too... first time I can ever remember, mind you I am "only" 30 - arf!

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Guest rigsby II
Adverts on the telly for National Savings Premuim Bonds.

National Savings?  That's where the Government borrow money from.

Surely they don't want people to deposit cash for them to borrow (what with the stable economy we have....)

Just wait until they start selling War Bonds...

And nicking your railings and draining the petrol out of your motor bike...

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Guest tenant super
Adverts on the telly for National Savings Premuim Bonds.

National Savings?  That's where the Government borrow money from.

Surely they don't want people to deposit cash for them to borrow (what with the stable economy we have....)

Here's an advert for premium bonds for you. Last week My mum dug out and gave me £6 of premium bond bought for me (and therafter forgotten apparently) in 1971. In all that time they have never accrued any interest/bonus)!

Although today they create 2 millionaires a month they fail to provide a proper* investment return above the real rate of inflation.

*Edit - Premium Bond interest is 3.25%, RPI 2.9% (June 2005).

Edited by tenant super

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Here's an advert for premium bonds for you.  Last week My mum dug out and gave me £6 of premium bond bought for me (and therafter forgotten apparently) in 1971.  In all that time they have never accrued any interest/bonus)!

Although today they create 2 millionaires a month they fail to provide a proper* investment return above the real rate of inflation.

*Edit - Premium Bond interest is 3.25%, RPI 2.9% (June 2005).

There is no interest as such on PBs. The monthly prize fund is calculated as 3.25% of total invested i.e. if you're averagely lucky, that's what you'll win over a year.

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There is no interest as such on PBs. The monthly prize fund is calculated as 3.25% of total invested i.e. if you're averagely lucky, that's what you'll win over a year.

I like that... averagely lucky... will have to fit that into my daily life me thinks

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The odds are listed at:Premium Bonds - Interest rates

The returns are likely to be quite variable, mostly because the number of prizes you win in a year will follow a Poisson distribution with low mean and then there is the matter of the skew in the prize amounts.

Suppose you buy 5000 pounds worth of bonds. That means you get 60,000 draws a year and at odds of 24,000 to 1, you get 2.5 prizes per year. Unless I've made a mistake (all too common) then the probabilities of getting N prizes with an expected number of 2.5 are:

P(0) = 8.2%

P(1) = 20.5%

P(2) = 25.7%

P(3) = 21.4%

P(4) = 13.4%

P(5) = 6.7%

P(6) = 2.8%

etc

The spread will narrow the longer the period you are considering and the more you own. The variance is the same as the expected number of wins.

Roughly 1 in 5 prizes has a value of 100 pounds or more, which are reasonable odds. Only 0.54% of prizes have a value of 500 pounds or more, which works out as 1 every 187 wins or 1 every 75 years if you have 5000 bonds. If you convert the value of all prizes over 50 pounds to 100 pounds then your returns will be 2.92% on average (unless I made a mistake!). I imagine the most likely result for a year is two wins of 50 pounds which is a return of 2%.

God I'm sad. Is anyone out there sadder? Did I make a mistake?

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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