Prize Bonds as alternative savings plan
I tend to view Prize Bonds as an alternative to drip feeding a PIP or PEP or other gradual contribution savings plan.
I have an aversion to management fees, both in these plans and in tracker or index funds. So I buy say 500 quid's worth of Prize Bonds at the start of every month, then after 10 or 12 months, I will cash the whole lot in, and use the cash to add to my equity portfolio. Then I'll start saving the 500 each month once more.
I tell myself that the effects of inflation aren't too bad in this case, as I only leave the money there for a year, and there's the added bonus of being in with a chance of a prize, however unlikely. I guess this appeals to my gambling side. But at the end of the year, I have the cash to add to my portfolio, or for a holiday, or whatever.