Prize bonds scam?

Paddyspurs1

Hi all. Hope some of you can share with this story. We have quite a few bob invested in Prize Bonds. We used win about €50 every fortnight for several years (yep, over a grand a year) which would help pay a few bills etc. All of a shot, since Jan 2016, we've barely won €100 in 8 months. We wrote to the Prize bond operators but they explained it away that it's "the luck of the draw". But we're not convinced. Anyone have similar experiences? We think there's something going on behind closed doors.

ItHurtsWhenIP

I've a 40 year old prize bond, that's never won a thing! :rolleyes:

Hollister11

Not really a scam. You can cash out for 100% of your investment when you want to.

Jellybaby1

ItHurtsWhenIP wrote: »

I've a 40 year old prize bond, that's never won a thing! :rolleyes:

We also have bonds for 40 years and never won a thing. Can't say I've even met anyone who ever won anything. OP is one of the luckiest people!

Negative_G

There is no scam.

The prize pot has been reduced to less than one percent recently. In addition to this there is millions of bonds being purchased every month, further decreasing your odds of winning.

There is an active thread in the Investments and Markets forum about Prize Bonds.

newacc2015

The payout on the prize bond is set by the NTMA based on the interest rate of the national debt. The interest rate has fallen to barely 1% on 10 year bonds, so the payout on prizebonds is low. It makes no sense for the NTMA to pay a huge amount out on prizebonds, when they can borrow from the market significantly cheaper.

When interest rates start to rise on Government debt, the payout on prizebonds will start to rise

mikepauline

Yes same as yourself purchased 1000's eight years ago.was winning 75 Euro approx 4 times a year,a it was then reduced to 50 euro and I continued to win about 4 times a year.
for the past three years or so I have been winning just once.This is obviously not a coincidence,your experience is the same as mine and when contacted I got the exact same reply as you.
They then reduced the monthly 1,000,000 to every second month and now it has been reduced to once every three months.

I was speaking to a solicitor and we were talking about prize bonds ,he informed that when dealing with Will's that prize bonds were the most difficult to retrieve.
I am going to cash in mine as I think we are being ripped off .

L1011

mikepauline wrote: »

Yes same as yourself purchased 1000's eight years ago.was winning 75 Euro approx 4 times a year,a it was then reduced to 50 euro and I continued to win about 4 times a year.
for the past three years or so I have been winning just once.This is obviously not a coincidence,your experience is the same as mine and when contacted I got the exact same reply as you.
They then reduced the monthly 1,000,000 to every second month and now it has been reduced to once every three months.

I was speaking to a solicitor and we were talking about prize bonds ,he informed that when dealing with Will's that prize bonds were the most difficult to retrieve.
I am going to cash in mine as I think we are being ripped off .

Its not a coincidence as the payout rate has been cut, repeatedly, as explained above.

You are unlikely to find a secured investment with a better notional interest rate; but as the notional payout rate is at random, they're not an investment I'd bother with currently. Have a few hundred myself but stopped adding to them ages ago.

CeilingFly

mikepauline wrote: »

I am going to cash in mine as I think we are being ripped off .

How do you reckon you are being ripped off?

The ONLY guarantee they give is the price paid is a guaranteed cash value whenever you want to cash it.

The prize fund calculation is public and based on an interest rate based on current market conditions.

In the nineties it would have been close to 10% but taking inflation into account the real value of the prize bond was reducing by close to 10% too.

Inflation is now near zero. Bank demand deposit rates are near zero, and as prize bonds can be cashed out on demand, the possibility of winning is almost a bonus.

Certainly no ripoff

MysticMonk

The so-called big prizes dont exist. The other thread on investments and markets is 5 years running with some people having up to 170k 'invested' and nobody has ever won more than 100 euros. In addition I have never heard of anybody,anywhere winning a big prize on bonds whereas I know three people who have won the lotto.

CeilingFly

MysticMonk wrote: »

The so-called big prizes dont exist. The other thread on investments and markets is 5 years running with some people having up to 170k 'invested' and nobody has ever won more than 100 euros. In addition I have never heard of anybody,anywhere winning a big prize on bonds whereas I know three people who have won the lotto.

Lotto - Buy €10 of tickets, number don't come up. Ticket in bin, €10 gone.

Of that €10, €5 goes into prizes that draw.

Prize Bond - €25 (4 numbers). If they don't win this week, you get anoither chance next week and the following week and the following week and the following week ad infinitum til you cash in in and get your €25 back.



Of the €25 bond, 0.86% per year goes to the prizes, That's 22c. Less than 1/2 c per weekly draw

Buy €25 of lotto tickets - €12 of that goes to the prize fund of that night's draw. In 2016 the lottery paid out €380m. In 2016 prize bond paid out approx. €24m, but the €2.9 Billion in bonds bought over the years can be cashed by the owners whereas the €700m spent just last year by lottery players is down the swanny

Basic math would suggest you will know a lot more lotto winners than prize bond winners because over 15 times the amount of money is paid out in prizes each year.

But do you know a single person who has got a full refund on a losing lotto ticket?

MysticMonk

CeilingFly wrote: »

Lotto - Buy €10 of tickets, number don't come up. Ticket in bin, €10 gone.

Of that €10, €5 goes into prizes that draw.

Prize Bond - €25 (4 numbers). If they don't win this week, you get anoither chance next week and the following week and the following week and the following week ad infinitum til you cash in in and get your €25 back.



Of the €25 bond, 0.86% per year goes to the prizes, That's 22c. Less than 1/2 c per weekly draw

Buy €25 of lotto tickets - €12 of that goes to the prize fund of that night's draw. In 2016 the lottery paid out €380m. In 2016 prize bond paid out approx. €24m, but the €2.9 Billion in bonds bought over the years can be cashed by the owners whereas the €700m spent just last year by lottery players is down the swanny

Basic math would suggest you will know a lot more lotto winners than prize bond winners because over 15 times the amount of money is paid out in prizes each year.

But do you know a single person who has got a full refund on a losing lotto ticket?

This is the justification for sinking money into the prizebonds..the idea you will get your money back.

After 10 years when you've one a couple of tiny prizes and you decide to cash them in...how much has inflation eaten away at the value of your "savings"?
What could you have bought with 60k in that time that would've served you better than load of worthless raffle tickets?
How many people actually cash them in? Most prefer to think if they hang onto them they'll eventually "win big"..it's a chimera.

Almost everybody on the other thread who regularly "wins" 50 euro has tens of thousands of euros in the bonds..nobody ever seems to win anything at all on less than 40k and even these gradually dry up in time.

I love Sean nos

So...not a scam and not a rip off then.

What's this thread about and why is it here?

CeilingFly

MysticMonk wrote: »

This is the justification for sinking money into the prizebonds..the idea you will get your money back.

After 10 years when you've one a couple of tiny prizes and you decide to cash them in...how much has inflation eaten away at the value of your "savings"?
What could you have bought with 60k in that time that would've served you better than load of worthless raffle tickets?
How many people actually cash them in? Most prefer to think if they hang onto them they'll eventually "win big"..it's a chimera.

Almost everybody on the other thread who regularly "wins" 50 euro has tens of thousands of euros in the bonds..nobody ever seems to win anything at all on less than 40k and even these gradually dry up in time.

Nowhere do I justify investment in prize bonds. But to compare it with a straight win or lose gamble is ridiculous.


Maybe if you understood how prize bonds work, you'd find your own argument does not add up.


Currently we are in a period of very low inflation and near zero or in some cases negative interest rates.

So a prize bond guaranteeing the principal amount paid is aa good as a bank deposit for many - even if they win nothing.

If interest rates rise, then so will the prize value in prize bonds as this is calculated annually and based on interest rates.


For many bigger holders of prize bonds its part of a balanced investment mix - shares, metals and other investments can move up and down. Government bonds and prize bonds give a guarantee of value - in the cases of some government bonds (German) that is a negative value where in ten years a 2016 10k bond is repaid in full in 2026 for 9950 (and it was oversubscribed)

Xterminator

MysticMonk wrote: »

This is the justification for sinking money into the prizebonds..the idea you will get your money back.

After 10 years when you've one a couple of tiny prizes and you decide to cash them in...how much has inflation eaten away at the value of your "savings"?

statistically no more or no less than leaving it sitting in your current account where fees cost more than interest paid.

prize bonds are a no risk investment, with a (slim to none) chance of a high return. still makes more sense than sitting in your bank account though.

vidapura

I had 10k in prizebonds for a few years.. basically it was my house deposit and we had to forget buying a house while the bubble was inflating so we figured we'd squirrel it away for a bit.

Like the OP I used to get fairly regular wins of small amounts.

We were a bit shocked when the first one arrived and even more entertained when more arrived...

Twas a bit of craic cos we started recognising the envelopes the notifications arrived in... so there'd be great excitement.. is this the BIG one ?? etc ..

I noticed that multiple wins did come in a fairly contained period of time (maybe over three months) and then twould go quiet again until the following year.. I surmised it was some sort of rolling number generator that got to my lump of the bonds every now and then...

At the time we bought them I remember reading we had a 1 in 4 chance of some sort of win if we had 1000 prizebonds.

Once the bubble burst we were eventually able to buy a house and had to break out the 10k .. so things are definitely quiet now.. heh.. I left the prizes in bonds tho, so I think I have about 3k or so in bonds still.. but haven't won a bean in a good while now...

I wouldn't ever feel its been misrepresented or anything like that.. accountants scoff at it as an 'investment' cos the return is notional really... and no way guaranteed..

I just wanted the money to be out of sight out of mind and not reachable by my banklink card.. heh.. so it did what it said on the tin as far as I'm concerned.

These days there is nothing in the way of interest from a savings account so...

The prizes we won were a boon .. glad to see em... but at no point did I Expect them...

CeilingFly

Prize Fund reduced to 0.5% of outstanding bonds

http://www.independent.ie/business/irish/less-chance-of-winning-big-as-number-of-top-1m-prize-bond-draws-reduced-again-35976514.html

Based on outstanding bonds of 3.1bn, total prize value for the year will be 15.5m

As above - you have to think of any prize won as a bonus, but its still better value than the german 10 year bond which has negative interest rate.

Xterminator

0.5% interest on a "savings account" with instant access.

its not great value, its not bad value.

NUTLEY BOY

Bear in mind that the prize fund has been very heavily reduced within the last few years.

There used to be a top prize of €1.0 million on the last Friday of every month. That was cut recently to twice a year only in June and December.

Even if the total invested in the prize bond fund remained the same the percentage being allocated to winnings has reduced quite a lot and so the probability of winning has effectively fallen.

The reduction in the prize fund is entirely consistent with the heavy NTMA reductions in all of the other State Savings products like Savings Bonds, Savings Certificates, Solidarity Bonds, Instalment Savings and your deposit account with them.

We have moved very far away from the heady days when you would get an additional bonus on your savings certificates or savings bonds if you left the whole investment run to it's maturity date.

The ability to invest in prize bonds was itself restricted with effect from 1 November 2015. Any purchases after that date were limited to a maximum cap of €250,000 per person. Anything you held before that does not count towards the cap.

Whilst it is easy to understand angst about levels of winnings dropping it is just a reflection of what is going on in the wider market for money itself.

MysticMonk

NUTLEY BOY wrote: »

There used to be a top prize of €1.0 million on the last Friday of every month. That was cut recently to twice a year only in June and December.

.

Has anybody,anywhere ever heard of anybody winning it?

L1011

MysticMonk wrote: »

Has anybody,anywhere ever heard of anybody winning it?

The winning numbers are available. There is no publicity bonus and no vendors prize so zero reason you will hear of it

MysticMonk

L1011 wrote: »

The winning numbers are available. There is no publicity bonus and no vendors prize so zero reason you will hear of it

Maybe somebody might,y'now..tell somebody?

looksee

I have a total of 6k bought in various units, mainly 1k and 5k. I won €75 about 3 times within about a year of purchasing, not a thing since.

CeilingFly

MysticMonk wrote: »

Maybe somebody might,y'now..tell somebody?

would you advertise to the country that you won 100k? or worse €1m? and deal with all the begging letters, scams and every tom dick and harriet getting jealous?

Cionsidering the number of big lotto winners very very few go public.

Squatter

CeilingFly wrote: »

Prize Fund reduced to 0.5% of outstanding bonds

http://www.independent.ie/business/irish/less-chance-of-winning-big-as-number-of-top-1m-prize-bond-draws-reduced-again-35976514.html

Based on outstanding bonds of 3.1bn, total prize value for the year will be 15.5m

As above - you have to think of any prize won as a bonus, but its still better value than the german 10 year bond which has negative interest rate.

I wish you hadn't posted that link, as it's very depressing!

"The top weekly prize will remain at €50,000 but the chance of winning €1m is now only available twice a year - down from four - in the last weekly draw of June and December. This will be the second time in just over a year that the number of top €1m prize draws has been reduced."

Tread softly, because you tread on my dreams!

NUTLEY BOY

CeilingFly wrote: »

would you advertise to the country that you won 100k? or worse €1m? and deal with all the begging letters, scams and every tom dick and harriet getting jealous?

Cionsidering the number of big lotto winners very very few go public.

If I won €1.0M I would keep sending those begging letters

Seriously though, if I won €1.0M I would do my legal best to hide that information as, in modern Ireland, you would become an automatic target for some heavy duty criminals. Going public with a big win would be looking for trouble.

MysticMonk

CeilingFly wrote:

would you advertise to the country that you won 100k? or worse €1m? and deal with all the begging letters, scams and every tom dick and harriet getting jealous?

I'm talking about friends and family..maybe somebody down the pub,or the local rural post office..secrets like that are hard to keep..not just from the wider community.
Look at that prizebonds thread over in investments and markets..Nobody has ever won more than 75 euro or lately 50 euro in SIX years despite at least one person having 160k worth of bonds.

So who wins these big prizes? As I said I've never heard of anybody and (neither has anybody I know) worn more than a few quid.

The interesting thing is that although what I'm saying is true,people will think up excuses all day long to say otherwise because THEY hold bonds and believe it to be a good idea.

I heard similar excuses from eircom "shareholders" who were all positive it wasn't in any way foolish because THEY knew better.

Huawei Gallagher

mikepauline wrote: »

I was speaking to a solicitor and we were talking about prize bonds ,he informed that when dealing with Will's that prize bonds were the most difficult to retrieve.
I am going to cash in mine as I think we are being ripped off .

Sorry a bit off topic but:
I have just been in this situation, about 50 euro worth of prizebonds belonging to the estate that I was administering, solicitor was sending out letters about them, it probably cost twice as much in solicitors fees as bonds were worth.

If you think you may meet your maker soon :eek: cash in small bond amounts now as it will just add legal costs to your family.

grogi

MysticMonk wrote: »

Has anybody,anywhere ever heard of anybody winning it?

In a typical lottery more less 50% of gathered money goes toward prizes. In bonds it is 100 times less... No wonder you don't hear about the winners.

But bonds are bonds - you don't loose money you put in.

Squatter

Charles Cabbage wrote: »

Sorry a bit off topic but:
I have just been in this situation, about 50 euro worth of prizebonds belonging to the estate that I was administering, solicitor was sending out letters about them, it probably cost twice as much in solicitors fees as bonds were worth.

If you think you may meet your maker soon :eek: cash in small bond amounts now as it will just add legal costs to your family.

Or just put them in your own and your kid (or kids') names - it's easy to do - and ownership will transfer straight to the survivor(s) - outside your will - after you have ceased to be.

L1011

MysticMonk wrote: »

I'm talking about friends and family..maybe somebody down the pub,or the local rural post office..secrets like that are hard to keep..not just from the wider community.
Look at that prizebonds thread over in investments and markets..Nobody has ever won more than 75 euro or lately 50 euro in SIX years despite at least one person having 160k worth of bonds.

So who wins these big prizes? As I said I've never heard of anybody and (neither has anybody I know) worn more than a few quid.

The interesting thing is that although what I'm saying is true,people will think up excuses all day long to say otherwise because THEY hold bonds and believe it to be a good idea.

I heard similar excuses from eircom "shareholders" who were all positive it wasn't in any way foolish because THEY knew better.

Are you accusing the NTMA of not actually awarding those prizes?

Can you suggest another quick access capital guaranteed investment for that volume of cash that doesn't actually have a negative interest rate?

MysticMonk wrote: »

Maybe somebody might,y'now..tell somebody?

There aren't very many of them. There never were. Many are actual investors.

Lotto players are not investors and would be much more willing to talk about a win. Additionally, as said, the majority of the ones you have heard of will have been from the media.