Are premium bonds a good investment?

[simonw]

For 23 years I had two £500 Premium Bonds which never won anything at all. Two years ago I sold them and took out ten £100 Premium Bonds instead. Same amount of money, but using more lower value bonds rather than higher value bonds. In the two years since doing that, I have had two £50 wins. Coincidence or not? I have no idea.

There is no such thing as a £500 or £100 premium bond. Each premium bond is £1 (although the minimum purchase is £25 or 25 bonds).

 

[Dai Corner]

I bought £10,000 of Premium Bonds last November and after six months had won £425 in prizes - about what I'd expect if I'd put the money in a cash ISA for a year. I recently sold £5000 to fund a large purchase. I've been lucky and am very happy with my return.

Note that this is a small part of my total portfolio and I wouldn't recommend anyone puts their entire savings into PBs

 

[RJ]

If you fill it up to £50k, you do tend to get at least one prize every month. But that could be as low as £25. There are definitely better ways to make a return, but it depends how much effort you want to put into it.

 

[styles]

If you fill it up to £50k, you do tend to get at least one prize every month. But that could be as low as £25. There are definitely better ways to make a return, but it depends how much effort you want to put into it.

I hold Premium Bonds because I want to do the lottery but I don't want to lose my stake. That's basically what they are to me. On average I will lose money compared even to a GIA and paying income tax on the gains, but it hits that lottery fix. And you never know, I might win the million one day.

 

[Djgr]

If you fill it up to £50k, you do tend to get at least one prize every month. But that could be as low as £25. There are definitely better ways to make a return, but it depends how much effort you want to put into it.

With that amount of premium bonds you can estimate the total prize money that you will get in a year with a fair degree of accuracy.

 

[Mcr Warrior]

News story doing the rounds today regarding a fair old number of £100,000 Premium Bond prize winners having not yet received what they're due. Seems slightly strange that National Savings & Investments haven't yet been able to trace who's due the money. Too difficult?

Premium Bonds: Unclaimed prizes from NS&I draws pass £100m

Critics want the system used to trace accounts to be reformed so people do not miss out on prizes.

www.bbc.com

Extract...

More than £100m of premium bond prizes remain unclaimed amid criticism that the government-owned bank which operates the savings scheme is not doing enough to find the winners.

Among the 2.5 million unclaimed prizes are 11 winners of £100,000 - the second-largest prize available.

 

[gg1]

News story doing the rounds today regarding a fair old number of £100,000 Premium Bond prize winners having not yet received what they're due. Seems slightly strange that National Savings & Investments haven't yet been able to trace who's due the money. Too difficult?

Premium Bonds: Unclaimed prizes from NS&I draws pass £100m

Critics want the system used to trace accounts to be reformed so people do not miss out on prizes.

www.bbc.com

Extract...

My guess is a lot of these are held by people who are no longer with us and weren't passed on to the next of kin.

When my dad died and my sister and I were going through his stuff, we found the paperwork for a few premium bonds our parents had bought back in the 70s. Neither of us knew he had them until then, if the relevant paperwork had somehow gotten lost over the intervening decades and multiple house moves, we'd have never have known about them.

 

[styles]

My guess is a lot of these are held by people who are no longer with us and weren't passed on to the next of kin.

When my dad died and my sister and I were going through his stuff, we found the paperwork for a few premium bonds our parents had bought back in the 70s. Neither of us knew he had them until then, if the relevant paperwork had somehow gotten lost over the intervening decades and multiple house moves, we'd have never have known about them.

Either that or people given them as a gift a very long time ago before it could be/was all done online.

My nan invested in premium bonds for me and my sister when we were younger, wanting us to use them for university. My mum took the money out when I was about 15 to buy me a laptop, which was a solid investment given I went on to become a software engineer! Had she not done that though, the record of our premium bonds would be a bit of paper in a lever arch file somewhere and even modest prizes would've gone 'unclaimed'.