| Premium Bond prizes are cut [message #390216] |
Fr, 19 Mai 2006 11:40 |
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Premium Bond prizes are cut
Sascha Hutchinson, This is Money
19 May 2006
INVESTORS in Premium Bonds will have less chance of winning the big
prizes after June 1 when the prize fund rate drops from 3% to 2.95%.
http://www.thisismoney.co.uk/saving-and-banking/article.html ?in_article_id=409189&in_page_id=7
http://tinyurl.com/ev9xg
Just for a change (apart from the usual comments), the bit that niggled
me was the "including the cost of posting out the winners cheques". I've
been nagging NS&I for ages to use direct debit - where available - to
pay prizes (for all sorts of wholesome reasons), but they've always
declined.
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| Re: Premium Bond prizes are cut [message #390218 ] |
Fr, 19 Mai 2006 12:31 |
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On Fri, 19 May 2006 10:40:32 +0100, Allan Gould
<invalid [at] invalid.invalid> wrote:
>I've
>been nagging NS&I for ages to use direct debit - where available - to
>pay prizes (for all sorts of wholesome reasons), but they've always
>declined.
At first I thought it incompetent but since the lowest prize is £50 -
ie a reasonable amount to many
<URL:http://www.nsandi.com/products/pb/howitworks.jsp#prizes>, I
suppose people would want something physical as evidence of the win
which, once cashed, they could retrieve to hang on the wall.
Daytona
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| Re: Premium Bond prizes are cut [message #390219 ] |
Fr, 19 Mai 2006 12:50 |
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Daytona wrote:
> On Fri, 19 May 2006 10:40:32 +0100, Allan Gould
> <invalid [at] invalid.invalid> wrote:
>
>> I've
>> been nagging NS&I for ages to use direct debit - where available - to
>> pay prizes (for all sorts of wholesome reasons), but they've always
>> declined.
>
> At first I thought it incompetent but since the lowest prize is £50 -
> ie a reasonable amount to many
> <URL:http://www.nsandi.com/products/pb/howitworks.jsp#prizes>, I
> suppose people would want something physical as evidence of the win
> which, once cashed, they could retrieve to hang on the wall.
>
> Daytona
Fair comment.
Response: send a paper statement of the winning (which has no value and
doesn't matter if it goes astray or gets abused in the post) and use DD
for the payment. Admittedly, NS&I still have to pay postage on the
statement, but I presume they also have to pay bank charges for
processing the cheque (like any other business) - I don't know if it's a
different cost for DD. DD could be optional for prize payments, is
safer (no cheques lost in the post), easier (no getting cheque to bank
to pay it in - esp for those with internet accounts only), and more
efficient. Prize goes into bank via DD and you get a paper statement (I
won't even dare to suggest e-mail notification - like some PLCs are now
offering for notifying dividend payments) so you get two notifications
of the prize (on bank statement and by post).
If some people wish a certificate of their winning to pin on the wall,
NS&I could offer it as a premium service. I don't particularly want one
and I don't wish to cross-subsidize those that may want one (or similar
evidence of their winnings to pin on the wall, show at the pub, golf
club, to the grand-children etc)
(Sorry: used 'direct debit' loosely to indicate direct credit)
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| Re: Premium Bond prizes are cut [message #390225 ] |
Fr, 19 Mai 2006 14:38 |
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On Fri, 19 May 2006 11:50:21 +0100, Allan Gould
<invalid [at] invalid.invalid> wrote:
>Response: send a paper statement of the winning
That, or a certificate simply isn't the same as a cheque though. A
cheque is the 'real thing' - a document of value.
It's catering for peoples emotional needs - emotion presumably being
the reason most people buy premium bonds.
Daytona
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| Re: Premium Bond prizes are cut [message #390231 ] |
Fr, 19 Mai 2006 16:11 |
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Daytona wrote:
>> Response: send a paper statement of the winning
>
> That, or a certificate simply isn't the same as a cheque though. A
> cheque is the 'real thing' - a document of value.
The most annoying thing about those £50.00 "cheques" we keep getting
every month is having to get my wife to sign them before they can be
banked. We would certainly prefer direct payment to the bank account.
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| Re: Premium Bond prizes are cut [message #390234 ] |
Fr, 19 Mai 2006 17:48 |
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Colin Forrester wrote:
> Daytona wrote:
>
>>> Response: send a paper statement of the winning
>>
>> That, or a certificate simply isn't the same as a cheque though. A
>> cheque is the 'real thing' - a document of value.
>
> The most annoying thing about those £50.00 "cheques" we keep getting
> every month is having to get my wife to sign them before they can be
> banked. We would certainly prefer direct payment to the bank account.
I wish I could have some of those £50 cheques every month (I could
probably handle being annoyed by a cheque for £50): they seem to have
dried up this year (last year was OK).
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| Re: Premium Bond prizes are cut [message #390235 ] |
Fr, 19 Mai 2006 17:49 |
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On Fri, 19 May 2006 15:11:40 +0100, Colin Forrester
<colin [at] thefrogslepthere.com> wrote:
>Daytona wrote:
>
>>> Response: send a paper statement of the winning
>>
>> That, or a certificate simply isn't the same as a cheque though. A
>> cheque is the 'real thing' - a document of value.
>
>The most annoying thing about those £50.00 "cheques" we keep getting
>every month is having to get my wife to sign them before they can be
>banked. We would certainly prefer direct payment to the bank account.
If you're getting them every month then it would appear to be less an
emotional thing than a considered investment. If so, why bother with
odds of 1:24,000 or 3% at an opportunity cost of £400pa when you've
got a 1:1 chance of earning 5% ?
Daytona
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| Re: Premium Bond prizes are cut [message #390237 ] |
Fr, 19 Mai 2006 17:50 |
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Daytona wrote:
> On Fri, 19 May 2006 11:50:21 +0100, Allan Gould
> <invalid [at] invalid.invalid> wrote:
>
>> Response: send a paper statement of the winning
>
> That, or a certificate simply isn't the same as a cheque though. A
> cheque is the 'real thing' - a document of value.
but people seem happy with bank statements indicating how much money
they have in the bank - yet a bank statement has no value?
> It's catering for peoples emotional needs - emotion presumably being
> the reason most people buy premium bonds.
emotion + investing... hmmm...
(but at least it's better than the Lottery - you get your stake back if
you want it back - and you might win something...
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| Re: Premium Bond prizes are cut [message #390238 ] |
Fr, 19 Mai 2006 17:53 |
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"Daytona" <me [at] privacy.net> wrote in message
news:mspr62p8986nngplsq9bremo1es0t6n7dm [at] 4ax.com...
> On Fri, 19 May 2006 15:11:40 +0100, Colin Forrester
> <colin [at] thefrogslepthere.com> wrote:
>
> >Daytona wrote:
> >
> >>> Response: send a paper statement of the winning
> >>
> >> That, or a certificate simply isn't the same as a cheque though. A
> >> cheque is the 'real thing' - a document of value.
> >
> >The most annoying thing about those £50.00 "cheques" we keep getting
> >every month is having to get my wife to sign them before they can be
> >banked. We would certainly prefer direct payment to the bank account.
>
> If you're getting them every month then it would appear to be less an
> emotional thing than a considered investment. If so, why bother with
> odds of 1:24,000 or 3% at an opportunity cost of £400pa when you've
> got a 1:1 chance of earning 5% ?
Maybe because 5% gross for a 40% tax payer *IS* 3% :-)
But, what is the actual 3% rate (or 2.95) once you have taken out the big
prizes.
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| Re: Premium Bond prizes are cut [message #390248 ] |
Fr, 19 Mai 2006 21:59 |
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"Miss L. Toe" <missltoemissltoe [at] hotmail.com> wrote in message
news:446dea4f$0$15851$892e7fe2 [at] authen.yellow.readfreenews.net...
> > If you're getting them every month then it would appear to be less an
> > emotional thing than a considered investment. If so, why bother with
> > odds of 1:24,000 or 3% at an opportunity cost of £400pa when you've
> > got a 1:1 chance of earning 5% ?
>
> Maybe because 5% gross for a 40% tax payer *IS* 3% :-)
Exactly. Premium bond winnings are tax free.
> But, what is the actual 3% rate (or 2.95) once you have taken out the big
> prizes.
Pretty close - IIRC something like 80-90% goes in the low value prizes.
--
Andy
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| Re: Premium Bond prizes are cut [message #390249 ] |
Fr, 19 Mai 2006 22:02 |
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"Allan Gould" <invalid [at] invalid.invalid> wrote in message
news:4d67qnF18upr0U2 [at] individual.net...
> emotion + investing... hmmm...
> (but at least it's better than the Lottery - you get your stake back if
> you want it back - and you might win something...
Nope - your "stake" is the interest.
It's similar to putting your money in a savings account and buying lottery tickets
with the interest. You stand more chance of winning a big prize that way.
--
Andy
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| Re: Premium Bond prizes are cut [message #390250 ] |
Fr, 19 Mai 2006 23:21 |
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Colin Forrester <colin [at] thefrogslepthere.com> wrote:
> Daytona wrote:
>>> Response: send a paper statement of the winning
>> That, or a certificate simply isn't the same as a cheque though. A
>> cheque is the 'real thing' - a document of value.
> The most annoying thing about those £50.00 "cheques" we keep getting
> every month is having to get my wife to sign them before they can be
> banked. We would certainly prefer direct payment to the bank account.
You are lucky. My mother still holds on to some premium bonds purchased
in the 60s when 10 quid was worth something... never won a penny
however.
And really they are not worth cashing in thesxe days.
Axel
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| Re: Premium Bond prizes are cut [message #390251 ] |
Fr, 19 Mai 2006 23:28 |
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"Andy Pandy" <spam8times [at] wonderful.spam.invalid> wrote in message
news:4d6mi7F18sum6U1 [at] individual.net...
>
> "Allan Gould" <invalid [at] invalid.invalid> wrote in message
> news:4d67qnF18upr0U2 [at] individual.net...
>> emotion + investing... hmmm...
>> (but at least it's better than the Lottery - you get your stake back if
>> you want it back - and you might win something...
>
> Nope - your "stake" is the interest.
>
> It's similar to putting your money in a savings account and buying lottery
> tickets
> with the interest. You stand more chance of winning a big prize that way.
>
But what about your chances of winning a £50 prize?
--
Tumbleweed
email replies not necessary but to contact use;
tumbleweednews at hotmail dot com
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| Re: Premium Bond prizes are cut [message #390255 ] |
Sa, 20 Mai 2006 11:25 |
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Allan Gould wrote:
> Premium Bond prizes are cut
> Sascha Hutchinson, This is Money
> 19 May 2006
> INVESTORS in Premium Bonds will have less chance of winning the big
> prizes after June 1 when the prize fund rate drops from 3% to 2.95%.
>
> http://www.thisismoney.co.uk/saving-and-banking/article.html ?in_article_id=409189&in_page_id=7
> http://tinyurl.com/ev9xg
NS&I's Press Release on their website
http://www.nsandi.com/press-room/press-releases/pr2004214.js p
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| Re: Premium Bond prizes are cut [message #390261 ] |
Sa, 20 Mai 2006 13:55 |
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"Tumbleweed" <thisaccountneverread [at] yahoo.com> wrote in message
news:4d6rimF19au4mU1 [at] individual.net...
> >> (but at least it's better than the Lottery - you get your stake back if
> >> you want it back - and you might win something...
> >
> > Nope - your "stake" is the interest.
> >
> > It's similar to putting your money in a savings account and buying lottery
> > tickets
> > with the interest. You stand more chance of winning a big prize that way.
> >
>
> But what about your chances of winning a £50 prize?
You're better off with premium bonds for small prizes. About 80% of the prize fund
goes in £50 wins, so if you invest the maximum £30,000 you're pretty much guaranteed
a regular stream of £50 prizes (on average 15 a year) with the odd £100 every year or
two. So about £800 a year. But even with the maximum £30000, on average you'll only
win a big prize (£5000+) every 340 years, and the jackpot every 42,500 years!
With the lottery, if you invested £30,000 in an account paying 3% interest net and
bought lottery tickets with the interest, you should get about 16 £10 wins and one
match 4 win (about £50) a year, so only about £210 a year. But your chance of winning
big are much greater - a match 5+ every 60 years and a jackpot every 15,500 years!
--
Andy
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| Re: Premium Bond prizes are cut [message #390357 ] |
Mo, 22 Mai 2006 20:05 |
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"Andy Pandy" <spam8times [at] wonderful.spam.invalid> wrote in message
news:4d8ecuF191380U1 [at] individual.net...
>
> "Tumbleweed" <thisaccountneverread [at] yahoo.com> wrote in message
> news:4d6rimF19au4mU1 [at] individual.net...
>> >> (but at least it's better than the Lottery - you get your stake back
>> >> if
>> >> you want it back - and you might win something...
>> >
>> > Nope - your "stake" is the interest.
>> >
>> > It's similar to putting your money in a savings account and buying
>> > lottery
>> > tickets
>> > with the interest. You stand more chance of winning a big prize that
>> > way.
>> >
>>
>> But what about your chances of winning a £50 prize?
>
> You're better off with premium bonds for small prizes. About 80% of the
> prize fund
> goes in £50 wins, so if you invest the maximum £30,000 you're pretty much
> guaranteed
> a regular stream of £50 prizes (on average 15 a year) with the odd £100
> every year or
> two. So about £800 a year. But even with the maximum £30000, on average
> you'll only
> win a big prize (£5000+) every 340 years, and the jackpot every 42,500
> years!
>
> With the lottery, if you invested £30,000 in an account paying 3% interest
> net and
> bought lottery tickets with the interest, you should get about 16 £10 wins
> and one
> match 4 win (about £50) a year, so only about £210 a year. But your chance
> of winning
> big are much greater - a match 5+ every 60 years and a jackpot every
> 15,500 years!
Thanks for that. Very helpful.
I'll stick with the Premium bonds :-(
tim
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