Savers have ‘only two chances’ to win Premium Bonds £1million prize

Martin Lewis advises on savings accounts and premium bonds

We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info

Earlier this year, NS&I raised the prize fund rate for Premium Bonds from 1.40 percent to 2.40 percent. Originally, the chances of someone winning a cash prize from the savings product’s lottery was one in 34,500. After this rate rise, the odds of someone taking home money have changed to one in 24,500 for each bond someone holds.

However, experts are sounding the alarm that savers will still have “only two chances” to win the £1million prize that everyone is hoping to get.

Unlike other savings accounts or products, Premium Bonds does not acquire interest in the usual way.

Anyone who purchases bonds are enrolled into a monthly prize draw where they have the opportunity to win a £1million jackpot prize.

Prior to the prize fund rate increase, two lucky individuals won the top prize but this looks set to continue despite NS&I’s most recent intervention.

READ MORE: 70 health conditions qualify for extra £156 a week in PIP from DWP

Laura Suter, AJ Bell’s head of personal finance, clarified what the prize fund rate hike really means for those who invest in Premium Bonds.

Ms Suter explained: “NS&I hasn’t boosted the top prize of £1million and there are still only two chances to win that jackpot each month.

“Instead it has rejigged the number of smaller prizes on offer, cutting the number of £25 prizes by more than 1m and dramatically increasing the number of £50 and £100 prizes on offer.

“It has also added eight more chances to win £100,000 and 15 more chances to win £50,000, among other changes.”

Outside of the £1million jackpot, thousands of bond holders are able to take home smaller amounts of money through the lottery.

Examples of other cash prizes someone can win through NS&I’s savings product are £100,000, £50,000 or £25,000.

Despite this new rate increase, experts are sounding the alarm that Premium Bond holders are still likely to end up with “zero returns” at the end of the day.

According to Ms Suter, alternative savings options may be better for those who want a guarantee on potential returns.

READ MORE: Paramedic shares how she dishes up tasty meals costing 68p per portion

She added: “However, savers shouldn’t cling to the ‘projected prize fund figure’ as many Premium Bonds holders get zero return on their savings.

“The odds of a £1 Premium Bond number winning a prize has only increased marginally from 1 in 24,500 to 1 in 24,000.

“Instead, most savers would be better off with a standard easy-access savings account that pays out a guaranteed rate of interest.

“There are a couple of groups of people who could benefit from using Premium Bonds, including the very wealthy and those nearing their tax-free savings allowance.”

For October 2022, the first winning Bond number drawn was 333XB827779 and came from someone in Outer London.

This person held £50,000 in Premium Bonds and purchased the winning Bond in June 2018.

The second winning Bond number drawn was 226HV323415 and this person came from Suffolk, becoming the ninth person to do so.

Suffolk’s latest winner had £50,000 in Premium Bonds and purchased their winning Bond in July 2014.

Source: Read Full Article