Premium bonds – do you feel lucky punk?

Dominic Thomas
March 2025 • 2 min read

Premium bonds – do you feel lucky punk?

You may remember the character portrayed by Clint Eastwood – Harry Callahan – aka Dirty Harry, who regularly had shoot outs with villains. As he faced them after a shootout and everyone had lost count of the number of bullets that had been fired, he aims his magnum 44 pistol and utters the words “do you feel lucky punk?”. Such was the ‘enlightened policing’ of the 1960s and 1970s …

Like many of you, I have a bit of a soft spot for premium bonds. There is something nostalgic about them; they feel safe (you are essentially depositing money with the UK Government). You have a bit of a monthly gamble, which unlike other forms of gambling, you do not lose your money if you don’t pick the winner (or place). The winnings are also tax-free and frankly who wouldn’t want to win a million British pounds? Besides, a Premium Bond is only £1 – and you can have up to 50,000 of them.

But let’s be honest with ourselves.

There are around 129 billion bonds in the draw each month. Two will win the £1m jackpot. Your chance of holding the winning bond is 1 in 64 billion.

There are a total of 5,902,600 prizes or winners each month. The chance of winning any sum from the smallest of £25 to £1m is 0.004%. Whilst that looks like a lot of winners (nearly six million) the vast majority (98.77%) win £100 or less. There are only 20,371 that win £1,000 or more.

As most people won’t win, they tend to get out of the habit of checking. At the last time of checking since October 2024, there are unclaimed prizes to the tune of more than £92m.

Yes you get to stay in the monthly draw, but chances do not improve unless you hold more than £24,500 of premium bonds; as the chance of winning any prize is 24,500:1 – in other words £25 winnings for £24,500 – each month – so expected winnings of £300 a year or 1.2%. This is not exactly an inflation-beating rate.

The annual prize rate is 1.4% – that’s the total amount of prizes paid in a year across all the deposits. So if inflation is at 3% or more in the real world, then you are going backwards, more so if you hold less than £24,500.

Meanwhile – deposit rates can be achieved of 3-4% without too much fuss at the moment (March 2025).

Do you feel that lucky? 1 in 64 billion lucky? – they haven’t even inflated the £1m winnings. Perhaps like Harry Callahan, you may not really know why you keep “doing it”, but it certainly isn’t about the interest.

BACK TO ALL BLOGS

LUCKY

Solomons-financial-advisor-wimbledon-blogger

Lucky

The last film starring Harry Dean Stanton is now on general release. This is the story of Lucky, (Harry Dean Stanton) a man who has survived everything. His quaint daily routines in small-town USA may help to explain his longevity but never explain his story. We see an elderly man living his daily rituals, a wash, morning yoga, cigarette, coffee, walk to the corner shop to buy cigarettes followed by stopping at the local café for the never-ending supply of coffee and time to sit to solve crosswords. Home to unwind and watch some day-time TV quiz shows, a call to a friend to exchange word for the day, followed by an evening visit to the local bar for a Bloody Mary… or two. Repeat. His demeanour often grumpy, somewhat cantankerous, he delivers pithy quips to those around him. At first he appears not to care much about for them, but of course this isn’t really the case.

There’s a difference between lonely and being alone

One day he falls at home, prompting a comical trip to his GP, (Ed Begley Jr) who is confounded at how Lucky is still alive, given his packet-a-day smoking habit. He is lucky. The episode prompts him to reflect more deeply on the meaning of his life and we see how his community responds to him, who are clearly able to see beyond the somewhat grouchy persona on display. Equally Lucky seems able to retain a lightness about himself, that accepts others and seems to find a level of intimacy with them that is both charming and real.

Plan your end

Lucky has a feisty, blunt exchange with Bobby Lawrence, (Ron Livingston) to be honest I cannot remember if he was an insurance salesman or a lawyer, but either way he is attempting to ensure Howard (David Lynch) organises his financial affairs. There is certainly a suspicion that Bobby does not play a straight-hand as Howard now seems to have nobody except his tortoise, Roosevelt, which invokes some mirth and some wonderful metaphors.

Lucky: He’s gone, Howard, and you’re all alone. We come in alone, and we go out alone.

Bobby: That’s awfully bleak.

Lucky: It’s beautiful. “Alone” comes from two words, all-one. It’s in the dictionary.

What do you do with that?

There are some fabulous lines about mortality, but essentially the film is about how Lucky comes to a sense of acceptance, albeit with anxiety, about his end. This is served up in recalled memories of the worst day of his life, a traumatic WW2 memory shared by a fellow vet Fred (Tom Skerritt) who met courage in a 7 year-old girl, “the sort that they don’t have medals for”… and a heart-warming scene for a 10 year-old Juan’s Mexican family birthday party.

You smile

Lucky he is indeed, for those on whom he made an impact and those that impressed friendship, or at the very least, a sense of connection upon him. In the final sequence, Lucky exits stage left after a knowing and rather wry wink to camera.

There is something in the movie that resonates with my sense of unvarnished truth. Lucky has his and delivers it without request or warning. I hope that I do not do the same, but fear those that know me best would probably recognise it. Then again, I’m also like Bobby Lawrence trying to guide people to plan sensibly for their end… though I hope without the inferences of being a beneficiary of the Will! As ever, many will have a very different reaction to this film, not much happens over 88 minutes, then again everything happens in 88 minutes.

Here is the trailer.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

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