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Last Updated: Friday, 5 January 2007, 18:36 GMT
Your Say: Premium bonds
Premium bond
Premium bonds pay no interest but can win tax-free cash prizes of up to £1m.

A prize draw is held every month and the more bonds you have the greater your chance of winning.

Individuals can invest up to £30,000 and this has led to concern the competition favours wealthier people and should be changed.

We asked for your experiences when buying premium bonds, and if you thought people with smaller amounts invested should be treated differently to those with maximum bond holdings.

This debate is now closed


I too have held a very small amount of bonds for many years, many given as presents when I was a child. I would be happy to buy more regularly if there was a way to invest by direct debit on a regular basis - £10 per month say. Bonds used to be £1 each, and more people would invest if there was a low entry point.
Jane Green, Leeds

The whole point of Premium Bonds is to encourage people to save. The more you save, the more bonds you have and the more chance you have of winning something. What part of that do people have difficulty understanding? Each bond has exactly the same chance of winning a prize so having only £100 for decades - it's no surprise you have won nothing.
Colin Wilcox, Stockholm

There is a lower risk than other forms of gambling
Michael Preston, Weybridge / Cape Town
The mistake people are making here is to regard Premium Bonds as an investment. They are not, they are a form of gambling, and if you don't win, you lose the interest you would otherwise have earned. However, as you never lose your original stake, although its value is eroded over time, there is a lower risk than other forms of gambling. Lower risk = lower probable return on investment. Simple! People should stop complaining and if they're not happy, invest in or gamble on something else.
Michael Preston, Weybridge / Cape Town

Looking at the savings website, they show the winnings down to £5,000. It shows the amount won, where the winner lives, their total holding in bonds, and when the winning bond was purchased. It shows that holders of small amounts of bonds have a chance of winning, but it also shows that there are no winners of bonds purchased in the 70's 60's or 50's. The majority were purchased in the 2000's. That shows it is advisable to cash in your old bonds and replace them with newer ones.

David Spayne

When I was very young my mother bought premium bonds to the value of £2 each for myself and my brother. An investment not to be sneezed at in a time when we were living close to the bread line. We never won a thing. When my mother died aged 87 a couple of years ago, I wrote to the powers that be to ask if any prizes had been awarded to our bonds over the many years we had them. The answer was a curt reply saying that the minimum investment amount is now £100 and anything from the past with so little value would not be included. They sent me a postal order for £2. Invest in any of the governments other savings plans? Not likely.
Audrey, Medway

Had many bonds for 40 years, not a single win. Waste of time for decent working people.
Alan, Durham

I invested £3,500 in premium bonds about three years ago. My only win was after I had telephoned to ask when they went into the draw, since then I have had nothing. I have just had a stroke and can no longer do a part time job. I am wondering if my money would be better put elsewhere or simply spent on making every day living easier.
Hilda, Hertfordshire

I have held a £10 bond for a little over 25 years now, and as yet have not won a penny! I think it' true that NS&I does favour those with bigger amounts. I don't recollect ever seeing a small bond winning a big prize, however, one can live in hope!
Steve Gregory, Edmonton

My mother-in-law has £2,000 invested in premium bonds and regularly wins £50 or £100 in the monthly draw. She is far from wealthy and enjoys her "£lutter" as she calls it.
Lynne Wood, Barnard Castle, Co Durham

I would love to be able to afford to buy bonds but can't afford the £100 minimum needed
Eddie, London
If you're not in you can't win! How many people do you think that applies to? The majority of the British population. I would love to be able to afford to buy bonds but can't afford the £100 minimum needed so as a low earner I am excluded from this, like it or not. I used to work for a guy who used the premium bonds as tax free savings account, not to mention his kids and wife's bonds as well. Every other month he won £50 or sometimes even more, talk about a way to help the rich get richer! It really is a closed opportunity for most hard working families.
Eddie, London

With any financial product that is tax free the people who pay 40% tax on savings are going to benefit more. So what? good for them! I would imagine there are plenty of people who work at the BBC who take advantage of tax breaks. I held premium bonds and had a good return equivalent to holding the money in a high interest account. I have now invested my money in NS&I index-linked certificates which are also tax free as I wanted guaranteed returns without the hassle of chasing interest rates. I can recommend them!
Paddy, Paddytown

In my experience premium bonds are an utter waste of time and money
John Miller, Farnham, Surrey
My dad bought his kids £5 or £10 worth each when "Ernie" was introduced, to much fanfare. None of us ever won a single penny over a period of 40 years. In my experience premium bonds are an utter waste of time and money and "Ernie" is now an obsolete pile of junk. Don't bother.
John Miller, Farnham, Surrey

Holding £100 of premium bonds is like buying two lottery tickets a week for a year and then being able to use them in every draw for as long as you like before selling them - pretty good compared to the lottery . However as for identity - if the information about requiring driving licence and passport is correct then National Savings is in the wrong. Many people do not, or choose not, to have these documents and not just if they are on lower incomes either. I would hope National Savings uses a little common sense here and allows any acceptable form of ID.
AJF, Central Scotland

It's fundamentally a lottery investment, with no return guaranteed, and a fairly ungenerous payout at 3.4%. I'm not convinced that premium bonds are a good investment for a small investor any more than lottery tickets are. Therefore I don't see why the threshold should be lowered.
Chris, London

Come on people, use your brains. If the average return over the long term is 3.4% then it's pretty obvious that with only £100 of bonds, you're likely to wait several years before winning anything - remember, the minimum prize is £50. If you were to allow even smaller bondholdings than £100, then those people would wait even longer on average for a win unless NS&I were to also introduce smaller minimum prizes. If you've got less than £100 to invest, and you're looking for a sure-fire return in the short or even medium term, then don't invest in premium bonds. But if you fancy a chance of winning £1,000,000 while retaining your original investment, it's the only game in town.
JC, London

I recently changed all of my small amounts into one large block and have had several wins
M A Allen, Cambridge
I agree that the newer numbers seem to win. I recently changed all of my small amounts into one large block and have had several wins. Having said that the wins are fewer since the introduction of two £lm prizes. I think there should be more smaller prizes.
M A Allen, Cambridge

I tried to open a national savings account a while back and I too was told I did not exist. I am a homeowner, have paid off two mortgages, been continuously employed since leaving school, always paid taxes in full, hold a driving licence, passport and am on the electoral roll. I am listed at companies house as a director, have signed the official secrets act and been subject to police checks for employment (and found clean). HMRC is quite sure I exist .
Edward, Brentwood

Premium bonds used to be for the small saver. When I was a child I would save my pocket money and buy a £1 bond, but now you cannot buy less than £100 and the less well off cannot do that.
Alan, Ipswich

When I was still a boy I was given £25 to invest in premium bonds. After 40 years I have still not won a thing.
Malcolm, Chigwell

My sister and I were both bought bonds in the first year they were available but as yet, we have not won a single thing. True, the amount was only £5, but how much would I have now if that £5 had been invested in a bank account? My sister has just purchased a further batch, but still the same result so far.
Laurence Chapman, Cambridge

Everyone benefits although many don't actually realise it
Steve
Look at the flip side. I jointly have £60k in premium bonds and this month didn't win anything. At current interest rates that's £255 I've just donated to government coffers. Everyone benefits although many don't actually realise it.
Steve

I have had a premium bond since the day they first started. I have watched the amounts that can be invested go up and up for many years (what a way for the government to get your money without you getting a penny back). I am now almost 64 and in all that time I have never won a single penny.
Mr Greaves, Barnsley

Lowering the minimum entry level would mean greater accessibility
Bronwen Arner, Halesworth, Suffolk
As I understand it, the minimum investment is £100. If this is correct, it does exclude a good many people including myself, who rarely have that much in a lump sum. Lowering the minimum entry level would mean greater accessibility and as suggested, more prizes at the lower levels would make bonds an attractive prospect.
Bronwen Arner, Halesworth, Suffolk

For many years I held a few bonds - under £200 - and won nothing. When I was able to invest the maximum - £20,000 - I won a small prize every month, until the maximum holding was increased to £30,000, at which point my winning streak ended! My experience shows that the maximum holding with consecutive numbers is the way to be sure of a return that allows the value of the investment to be maintained. Another experience within the family indicates that the newer numbers tend to win, so re-investment could be a good idea. It is worth a gamble for 12 months if you have £30,000, but after that put the money elsewhere. Now that I am again a "smaller saver" I would not use premium bonds. Perhaps it is time for NS&I to look at some other scheme for those with less "spare" money.
C R French, Northampton

If the threshold was lowered, many more people could participate
Rachel, Orpington
I like the concept. It's similar to investing in the lottery - no return on investment unless you win. But the advantage with premium bonds over the lottery is that you can get your investment back. However, the biggest problem with premium bonds is the minimum investment threshold. Setting it at £100 excludes many, many people from investing. I would like to buy for my children with their birthday money, but expecting £100 is too much. Given that the bond certificates are just written on printed A4, surely there is only minimal extra admin costs. If the threshold was lowered, many more people could participate.
Rachel, Orpington

The view that premium bonds favour the rich is idiotic!
Mike Sinclair, Oxford
The view that premium bonds favour the rich is idiotic! If you buy 1,000 lottery tickets you clearly have more chance of winning than if you buy one ticket. Nobody would argue with that. If you have £1,000 worth of premium bonds you also have more chance of winning than if you buy one premium bond. Don't you understand maths or statistics?
Mike Sinclair, Oxford

May I ask what planet NS&I is living on? My wife and I are on low incomes have no assets and no access to credit. We have finally managed to save up £100 to buy a set of premium bonds - it took us six months to save up for this. May I suggest that the minimum holding is reduced to perhaps £25? I would prefer £10 but I guess the admin charges might be considered too high. I am in total agreement regarding having part of the draws biased to those of us with relatively small amounts to invest. I thought the point was to enable anyone access to savings and a chance of a win. At present it appears that it's like most other schemes - let the rich get much richer and sod the poorer folks.
Tony Roskilly, Hereford

Congratulations to the NS&I representative who persisted in pointing out the simple fact that each bond has an equal chance of winning. Of course there is no "bias" in favour of large holdings. Presumably your journalist is not so stupid as to not understand simple maths so it must just be the usual media provocation.
Andrew Shand, Bristol

Looking at recent the results, the appearance of 30K holders winning most of the £1m every month. It's obvious The "rich" will invest. The "poor" will not waste their money. Ten pound holder from 1983... no luck!
John, Shoreham

Treating each one equally is the only fair way to do the draw
Nigel Whitfield, London
Every bond has the same chance of winning - why should it be any different? Complaining that if you have more bonds you have a greater chance of winning is about as pointless as complaining that if you can afford to waste £100 on the National Lottery instead of just £1, you'll have a greater chance of winning. It may perhaps be better if you could buy fewer bonds, as you once used to be able to, but treating each one equally is the only fair way to do the draw and it certainly shouldn't be changed.
Nigel Whitfield, London

Does that mean we have to change the rules for the lottery, raffle Tickets, football pools and so on? Obviously, if someone buys more of something like this, they have a higher chance of winning.
Roger, Cheshire

My wife and I have held a few premium bonds since 1958/9 and never had any return. Is this a record?
Michael Tompkins, Chester

I've never won anything from premium bonds, and I've had £100 in for years. After reading an article on Martin Lewis's website (he was on the programme today as well) I sold mine. It shows the chances of winning for most people aren't worth it.
Pauline Mason, Lemington

Over the long term premium bonds are quite a poor investment. There is no adjustment for inflation so if you hold the bonds for 10 years and win nothing, your money will be worth less than when you started. So it is really only worth investing over £24,000 as you increase your chances of winning but there is no guarantee you will win anything?
KR, Southall


The comments we publish are not necessarily the views of the BBC but will reflect the balance of views we have received. It is helpful if contributors state if they work for any organisation relevant to an issue discussed. Readers should form their own views on whether messages published represent undeclared interests, or views prompted by a common source.



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