Premium Bonds prize win rate to increase but odds of winning still ‘relatively low’ | Personal Finance | Finance
Savers may think that a three percent win rate makes the product competitive with some conventional savings account, with the top easy access saver currently paying 2.9 percent. But analysts at MoneySavingExpert warned there is still a “negligible” chance of winning the £1million jackpot.
People with Premium Bonds are entered into a monthly prize draw rather than earning interest on their Bonds, with two £1million jackpot winners each month.
The odds of winning will remain the same at 24,000 to one, but there will be more than three times as many prizes between £5,000 and £100,000 in the next draw.
Savings experts warned that although savings accounts pay a constant rate of interest, Premium Bond holders risk not winning any prizes.
Chris Collier, senior analyst at MoneySavingExpert, wrote in an article on the group’s website: “You’re actually likely to get quite a lot less than 2.2 percent or 3 percent, and there’s a negligible chance of winning a million.
“If you know and you’re okay with this, then investing in Premium Bonds isn’t a bad plan.”
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The group estimated the number of £100,000 prizes in the January draw will go up from 18 to 56, compared to December.
Figures from the group suggest the number of £50,000 prizes could go up from 36 to 112, while the number of £25,000 prizes will go up from 36 to 112.
People can check if they have won a prize using ther prize checker on the NS&I website, via the app or using an Alexa device.
This month’s £1million jackpot winners came from the Scottish Highlands and Islands and Wandsworth.
Winners can reinvest their funds in more Bonds, increasing their chance of winning in the future.
Other recent figures from MoneySavingExpert showed there were millions of unclaimed prizes, with more than 1,500 worth £1,000 or more.
The statistics showed there were five unclaimed prizes with £100,000 and nine worth £50,000.
Winners of 11 prizes worth £25,000 have also yet to collect their money, while 37 prizes for £10,000 have still not been claimed, along with 69 prizes worth £5,000.
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There were unclaimed prizes that went back to the 1960s, including one prize for £1,000 from the September 1969 draw.
Martin Lewis, founder of MoneySavingExpert, recently spoke about how many Bonds a person would need to buy to have a good chance of winning, on his ITV show.
He used a probability calculator to show people with “typical luck” would get nothing with an investment up to £1,000.
Typical luck refers to the median average of those who have won, whereas the prize fund is the mean average.
He said a person could win £1,000 with £50,000 in Bonds, which is a two percent increase, still less than the top easy access account.
Mr Lewis said: “So with typical luck, Premium Bonds win less than the easy access and they win a lot less than fixed accounts.
“Most people with money in Premium Bonds don’t do it for the short term, they do it for the long term.”
Savers can cash in their Premium Bonds at any time without penalty. According to NS&I, it takes up to three banking days for the money to reach your account, unless you have elected to cash in after the next draw.