Wait another 5,000 years to win NS&I jackpot

2023-01-21T08:00:00.0000000Z

2023-01-21T08:00:00.0000000Z

Daily Telegraph

https://dailytelegraph.pressreader.com/article/281526525176547

Money

NS&I has increased the Premium Bonds prize rate to 3pc a year, but analysis suggests that most savers will never get close to those returns. The odds of each £1 bond winning a prize remain the same as they were when the rate was at 2.2pc last month, at 24,000 to one. Nearly 24 million savers have Premium Bonds, but six out of 10 bondholders are unlikely to win prizes totalling 3pc in a typical year, according to analysis commissioned by the Family Building Society. Only a third (36pc) of those with maximum holdings of £50,000 are likely to receive 3pc. The chances of winning £1m have dropped since the prize rate was at 1.4pc last year, because there are still only two of these prizes but more accounts are competing for them. Someone with £ 50,000 of bonds would have to wait 69,000 years to win a £1m prize, on average, up from 64,000 when the prize rate was at 1.4pc, the study found. Just over one in every four pounds of a win for all bondholders will now be from the smallest £25 prizes. A further 58pc of winnings will be made up of £50 and £100 prizes. The chances of winning prizes of £1,000 remain relatively rare: someone with £50,000 would need to wait 12 years, on average, to win a £1,000 prize and 248 years to win a £10,000 prize. The odds of winning decline considerably for those with smaller amounts in Premium Bonds. Someone with a typical holding of £ 1,881 would need to wait 102 years to win even just a £500 prize. While the probability of winning prizes of £25, £50 and £100 has increased, for those with larger amounts deposited in Premium Bonds the probability of winning a prize of £ 5,000 or more remains less than 1pc. Keith Barber of the Family Building Society said: “On the face of it the increased prize fund of 3pc appears to be good news for Premium Bond holders. However, this research shows that for the majority of bond holders a meaningful prize remains out of reach. “With no interest paid and in an era of high inflation, many Premium Bond customers will continue to see the real value of their deposits fall significantly over time. Fixed-rate bonds and Isas offer more value.” Anna Bowes of Savings Champion said the odds of winning may remain the same but the prizes that can be won are larger. She said: “You have random luck, but the higher the holding, the more likely you are to win. For higher-rate taxpayers in particular, prizes are tax free, which makes them even more valuable.”

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