Premium Bonds holders may be puzzled as to why there’s an increase in the number of £25 prizes in the December draw, despite a drop in the overall prize count. Nationwide Saving and Investments (NS&I) is to cut the prize fund rate for their popular savings product from 4.4 percent to 4.15 percent starting with the December draw, resulting in the odds of winning for each £1 Bond falling from 21,000 to one to 22,000 to one.
According to figures from NS&I, approximately 260,000 fewer prizes will be awarded in December compared to October, with the total prize pool decreasing by about £25 million. Interestingly though, the amount of £25 prizes is set to rise, up from 1,490,033 in October to 1,509,458 in December.
When questioned on how prize distribution is determined, an NS&I spokesperson explained: “The number of prizes at each level will vary each month dependent on the prize fund with the exception of the £1 million prizes which is always two.”
The provider also stated said that the Premium Bonds prize structure is divided in this way:
- 10% – high value (Two £1million jackpots each month and prizes from £5,000 to £100,000)
- 10% – medium value (£500 and £1,000 prizes)
- 80% – low value (£100, £50 and £25 prizes).
These are how the number of prizes will change from the December prize draw, compared to October:
- £1,000,000 – 2 – remaining the same
- £100,000 – 83 (down from 88)
- £50,000 – 167 (down from 177)
- £25,000 – 322 (down from 353)
- £10,000 – 830 (down from 883)
- £5,000 – 1,664 (down from 1,766)
- £1,000 – 17,426 (down from 18,452)
- £500 – 52,278 (down from 55,356)
- £100 – 2,072,099 (down from 2,212,098)
- £50 – 2,072,099 (down from 2,212,098)
- £25 – 1,509,458 (up from 1,490,033).
Every £1 Bond has an identical chance of winning, meaning purchasing additional Bonds can enhance one’s odds. Customers are able to hold up to £50,000 in Bonds, and it’s common for savers to arrange so that any cash winnings are reinvested in acquiring more Bonds.
Yet, with the recent reduction in the prize fund, finance expert Steven Kibbel, who is the chief editorial advisor at Gold IRA Companies, has advised that Premium Bonds are no longer reliably effective for growing savings. He warned savers that they “can’t count on them as a solid way to grow your savings anymore”.
He expressed: “We’ve already seen cuts, and more could follow. NS&I adjusts its rates depending on a lot of factors, and they’re not immune to the economic shifts we’re all dealing with. It’s smart to keep an eye on alternatives and spread out where you put your money.
“Relying on Premium Bonds alone doesn’t cut it for most people these days. You want stability, and unfortunately, Premium Bonds just aren’t offering that right now.”