Savers can improve their odds of winning Premium Bonds’ £1million priz

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Premium Bonds: Expert on chances of winning prize draw in May

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Premium Bonds is a savings product offered by National Savings and Investment (NS&I). Unlike other accounts, interest is acquired in the traditional way. Instead, savers are enrolled into a monthly prize draw where they have the opportunity to win upto £1million, as well as other sizable cash prizes. In light of this, bond holders are looking for the best ways to improve their odds of taking home this £1million jackpot.

Earlier this year, NS&I raised the prize fund rate for Premium Bonds from one percent to 2.4 percent.

Before the change in May, the odds of someone winning money from NS&I’s lottery were one in 34,500.

Following the financial institution’s decision, the odds of winning have now changed to one to 24,500 for each bond someone holds.

Various experts have shared how people can boost their odds of winning money from Premium Bonds.

Martin Lewis, founder of MoneySavingExpert.com, broke down how savers can improve their chances of winning £1million prize on the website.

Mr Lewis said: “The more bonds you have, the closer you get to the prize fund rate, and this is where the scales start to tip in Premium Bonds’ favour.”

However, Sarah Coles, a senior personal finance analyst at Hargreaves Lansdown, issued a warning to those expecting to take home big gains from NS&I’s savings product.

Ms Coles explained: “You need to understand what you’re giving up. You don’t make any interest on money in Premium Bonds. 

“And while at a time of low inflation you may feel this is a small price to pay for the chance of a big win, while inflation is running so hot, it means the spending power of your money is being eroded far more quickly. It means holding Premium Bonds comes at a higher cost.”

“You also need to appreciate that the prize rate is not the same as the returns you can expect. If you hold the bonds you won’t make 1.4 percent.

“Those with better-than-average luck will make more, and those with less luck can go decades without a win. In an average year, someone with £1,000 in the bonds will win nothing.”

The finance expert encouraged savers to be aware of what their odds of winning really are before investing in Premium Bonds.

She added: “It’s worth knowing the chances of a win too. While the chance of any win at all with a £1 bond is 24,500, in May, the chances of winning £1 million were 1 in 58.91 billion – which is vanishingly small.

“Even after the prize rate changes, there will still only be two million pound prizes, so the odds of winning a million haven’t improved.

“In fact as more people buy more bonds, unless the number of million pound prizes increases, the odds will get worse.”

For September, one of the two jackpot winners held £50,000 in Premium Bonds and purchased the winning bond in August 2020.

The second winning winner held £50,000 in Premium Bonds and purchased their winning Bond in February 2018.

Overall, a total of 4,862,556 cash prizes worth £138,988,000 were handed out to bond holders. across the whole month

Martin Lewis is the Founder and Chair of MoneySavingExpert.com.

To join the 13 million people who get his free Money Tips weekly email, go to www.moneysavingexpert.com/latesttip

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