More Winners For Premium Bonds
A higher chance to win
Effective from the June 2022 Premium Bond prize draw, NS&I has confirmed that they have increased the prize fund rate from 1% to 1.4%. As a result, the odds of each £1 Premium Bond number winning a prize has improved from 34,500:1 to 24,500:1.
This is following a reduction in the number of prizes available from December 2020, when the prize draw interest rate fell to only 1%.
With this change, the prize fund will see an overall increase of 1.4 million prizes paid out in the June Premium Bond prize draw alone.
John Glen, Economic Secretary to the Treasury, commented on the increase: “Premium Bonds have offered the public an alternative way to save since they were first introduced in 1956, and next week marks 65 years since ERNIE drew the first Premium Bonds prize winners."
“I’m delighted to see NS&I raise the prize fund rate on Premium Bonds, which will see an additional 1.4 million prizes worth £40 million being returned to savers each month – helping to put money in the pockets of the nation’s savers.”
What are Premium Bonds?
Premium Bonds are issued by National Savings and Investments (NS&I) but are unlike other savings accounts where you earn interest or a regular decided income.
Rather than paying interest to the bond holders, the interest earned from the Premium Bond prize fund is used for the monthly prize draw, where you stand a chance to win tax-free lump sum prizes of between £25 and £1 million.
Are Premium Bonds right for me?
With inflation currently standing at 9%, many are looking for alternative ways to beat inflation, giving them a chance at making a real return. Many savers have cash sitting in savings accounts earning as little as 0.1%, so 9% inflation effectively means savers are losing money in real terms. To see the damage inflation is having on your cash savings, try our Inflation Calculator below.
Premium Bonds certainly offer this with the chance to win big, although the likelihood of doing so is very small. For some, it’s a genuine alternative to having your savings waste away in a high street bank savings account. At least with Premium Bonds, there is a chance to get something substantial.
However, the greatest strength of the Premium Bond is also its greatest weakness. Many will find the roll of the dice of Premium Bonds to be falsely alluring due to their unreliable nature. For those who are reliant on a stable income, or those who don’t have a reasonable amount of cash to deposit, Premium Bonds may not be the most future-conscious choice.
If you’re looking for an alternative to cash savings and ways to try and beat inflation, why not get in touch, and see if we can help with a free non-committal initial consultation. However, if you’re just keen to know the best places to save, have a look at our sister company website for all the best rates and information on cash-based savings accounts.
Please note: This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions. The value of your investments and the income from them can go down as well as up.