Premium Bonds - Investment Strategy?

You can only put a max of 30k in bonds. For that you will average 15 wins a year (so they say) of at least 50 and maybe 1,000,000. Of course you may get many less or more.

£30,000 max. No interest, so you're losing money every year due to inflation. So you'd better hope you're lucky and can make at least inflation back in prizes. I'm never that lucky so I just bought £500 worth. I guess £100 might have been better?

I have had around a hundred premium bonds since 1967. Sometimes I changed them, in order to refresh the numbers. I have never won a red cent. Occasionally I check the lists to see if there is any unclaimed prize. Zilch. Not even a tenner!

MM

"Mike Mitchell" wrote

Why? Don't you think that's just a waste of time?

"Mike Mitchell" wrote

That's usual - UK premium bonds are denominated in Sterling, so you shouldn't win *any* cents - red, blue, green or any other colour.

"Mike Mitchell" wrote

*No-one* has won a tenner recently...

If you check out the winning prizes and how many bonds the winners are holding, usually they have £10,000 or more, but some guy won the other day with a mere £22 holding! Lucky, lucky bastard!

Any good reason for this limit? Premium bonds are a cheap source of borrowing for the government, so why should the holdings be limited?

In message , Steve writes

Yes, they are fickle. The prize pool and the odds have to be constantly adjusted to keep them competitive with the market so as to ensure stability of funds, and this means uncertainty of future cost to the Govt. Also PSBs can be encashed on demand, thereby giving more uncertainty as to when they will be redeemed.

Gilts, on the other hand, once issued have no such uncertainties with the cost to the Govt and the period of investment being fixed at the outset.

If I could afford it, I would put a lot more into PBs. I read somewhere that if you hold the maximum you're practically guaranteed to get one win each month.

MM

Are you serious? I makes no difference to the chance of winning and costs you the absence of a month from the draw each.

R

Yeah, well, it didn't make any difference anyway! I still didn't win. I swapped some of them for new ones because the general consensus at the time was that this was a 'good idea'.

MM