Major change to Premium Bonds

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SAVERS may have a greater chance of hitting the jackpot as the shake-up for premium bonds has made it easier to win.

NS&I adds an additional 1.4 million prizes to its monthly prize fund, making it more likely premium bond Holders will get some good news from Ernie.

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Changes to Premium Bonds Could Mean You’re Getting Some Good News from Erniecredit: Alamy

Premium bonds are a type of savings account backed by the government.

But instead of getting a fixed interest rate like you a high street bankYour money is entered into a prize draw every month.

Savers can receive prizes ranging from £25 to £1 million.

And now the change in draw has made winning easier.

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Premium Bonds Pay Effectively Rate of interest of 1% – This is calculated based on the average of your chances of winning, but comes without any guarantees.

So if you have £1,000 in savings, it is estimated that you can expect to win prizes worth £10 per year on average.

From June this rate will be 1.4%.

The odds of each £1 premium bond number winning a prize will increase from 34,500 to one, 24,500 to one.

From June, it is estimated that an additional 1.4 million prizes will be paid out.

There are likely to be 10 payments out of £100,000 next month, up from just six in May.

Some 19 lucky winners will receive £50,000, while 98 savers will receive £10,000.

Each month, two winners will claim the £1 million jackpot – but the odds of winning the top prize are just one in 58.9 million.

And there’s no guarantee that you’ll win anything – in fact, on average, people with £1,000 saved in premium bonds won’t win anything, according to Hargreaves Lansdowne.

Sarah Coles, senior personal finance analyst at Hargreaves Lansdowne, said: “If you hold bonds, you won’t make 1.4%. People with better luck than average will earn more, and people with less luck can go decades without a win. “

in it to win it

Premium bonds were launched 65 years ago and now more than 21 million savers have money in the product.

Coles said: “People are attracted by the potential for life-changing winnings, the fact that the rewards are tax-free and the fact that the money in premium bonds is 100% backed by the Treasury.

“But you need to understand what you are giving up – you do not charge any interest on the money in premium bonds, so the spending power of your money is diminishing.

“And as more people buy more bonds, unless the number of prizes worth £million increases, things will get worse.”

recently increased bank of england The base rate means that some savings rates are rising.

Marcus and Nationwide are among banks and building societies that have raised interest rates. savings accounts,

But savers still see a loss in real terms on any cash deposited in the bank, as rising inflation means the cost of living growing at a much faster rate than their savings.

This month, inflation reached a 40 year high 9% And it is expected to climb further.

That means it’s more important than everyone else to make sure your money is working hard for you.

According to MoneySavingExpert, the most generous easy-to-access savings account currently available is from Chase Bank, and it offers an interest rate of 1.5%.

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If you’re happy to lock your money for six months, you can get 2% interest from Shawbrook Bank, and if you lock your money for two years, Vanquis Bank pays 2.62%.

NS&I Chief Executive Ian Ackerley said: “The new rewards funds rate ensures that premium bonds are priced reasonably compared to the interest rates offered by our competitors.”

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