A BIG change is coming to Premium Bonds next month and it could affect your chances of winning.
The NS&I prize fund rate will be cut from 4.65% to 4.40% in March 2024, while the odds of a prize will remain at 21,000 to one per £1 Bond number.
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The number of top prizes of £1million is expected to remain at two but the number of winners of the second best prize of £100,000 is predicted to fall by six.
Despite the fall in the prize fund rate, it remains higher than in the March 2023 prize draw.
From March 2024, all prizes except for the lowest of £25, are predicted to have fewer winners than they did this month.
All prizes except for the lowest of £25, are predicted to have fewer winners this March.
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The number of £25 winners is expected to rise to around 1,435,338 compared to 1,037,784 last month.
In total March is predicted to see just over 72,000 fewer winners than January of this year.
NS&I will announce more details about the Premium Bonds prize winners on Friday, March 1.
The NS&I has said it is attempting to “strike a balance between the interests of savers, taxpayers and the broader financial services sector.”
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Andrew Westhead, NS&I retail director, said: “These changes reflect our requirement to strike a balance between the interests of our savers, taxpayers and the stability of the broader financial services sector.”
“In a dynamic savings market, it’s important that our rates are set at an appropriate position against those of our competitors as we work towards meeting our annual Net Financing target.”
“After these changes, the Premium Bonds draw in March is expected to pay out over 5.7 million tax-free prizes totalling more than £444 million to savers across the UK.”
At the end of last year, the Premium Bonds prize fund rate reached a 15-year high increasing to 4% from 3.70%.
This was mainly due to interest rates going up but the number is now going down as interest rates are expected to fall.
What are Premium Bonds?
Premium Bonds are a type of savings account that don’t offer interest payments like conventional accounts.
Instead, you’re given the chance to win a prize worth up to a whopping £1million every month.
Premium Bonds can be bought from the government-backed National Savings and Investments (NS&I) which also offers a variety of other savings products too.
Because Premium Bonds are government-backed, your money is safe and there’s no risk of losing your cash.
You can put money in and take it out whenever you want but need to put in a minimum of £25 to get started and you can invest up to £50,000.
Each £1 you put in Premium Bonds is an entry into the monthly prize draw.
What are the Premium Bond prizes?
The draw is held each month and the winning number is picked by a computer called ERNIE (which stands for electronic random indicator equipment).
There are three kinds of prizes:
- Higher value prizes of £5,000, £10,000, £25,000, £50,000, £100,000 and £1million
- Medium value prizes of £500 and £1,000
- Lower value prizes of £25, £50 and £100
How likely am I to be a winner?
The chance of winning a prize with an individual bond right now is 21,000 to one.
Each bond has an equal chance of winning and the more you buy, the more your chances improve.
You can check your odds depending on how many bonds you have and how long you’ll keep them using MoneySavingExpert.com’s helpful calculator.
This makes it easier to see if Premium Bonds are right for you, or if you’d be better off with another savings account.
It’s also worth noting that Premium Bond winnings are tax-free.
Anyone who has used up their annual ISA limit or personal savings allowance could benefit by saving into Premium Bonds.
How do I check if I have won?
You can use the NS&I Premium Bond prize checker online to see if your numbers have come up.
You’ll need to know the numbers of your Premium Bonds which you can find on your Bond record or online account.
If you’ve lost track of your numbers you can reach out to NS&I and ask for them.
There’s also an official app for iPhones and for Androids for checking prizes too, and even an App for Amazon Echo which means you can just ask Alexa.
For this, you will need to use your NS&I number rather than each Premium Bond number.
It’s 11 digits long and should be on any communication you’ve had with NS&I.
You don’t always need to check your numbers as you can get prizes under £5,000 paid straight into your bank account, or automatically buy more Premium Bonds.
For higher value prizes worth more than £5,000 NS&I will contact you by post and if you scoop the £1million jackpot, someone will pay you a visit to let you know!
Note that NS&I will no longer send out prize cheques in the post.
Before you sign up, it’s important to check how it compares to the rest of the market to make sure you get a good deal.
In other banking news, a major bank is offering customers a £175 cash bonus but you will need to act fast.
Another major bank is giving away £200 in free cash with one easy move.
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Seven tips to help you turn pennies into pounds
You’ve been saving your money all wrong, here’s our top tips
- Clear your debt
Before you start saving money, it’s best to get rid of any expensive debt.
This is because interest racks up on loans or credit cards at a faster rate than you can earn interest on a savings account.
- Set a goal
It sounds obvious, but saving money is a lot easier when you know what you’re working towards.
Whether it’s a new laptop, a summer holiday or your retirement, it’s important to have a goal in mind.
Find the best savings account
Interest rates are very low, which makes it harder to grow your money – so you really need to find the best savings account you can.
- Take on a savings challenge
A money savings challenge is a great way to really kickstart your habit.
The small amounts saved each day can really add up over time.
- Automate it
It’s easy to forget to move your money to a savings account each month if you have to do it manually.
Set up a monthly direct debit from your bank account to your savings account, that way you don’t have to worry about or risk putting it off.
Round-ups are a good idea if you do lots of little transactions too.
Some banks and apps will automatically round up your purchase to the nearest pound and transfer the difference to a savings accounts.
- Stick to your budget
Tallying up your spending is a must for anyone looking to get into good money habits.
Add up what your monthly outgoings are on essentials, and then work out where you can cut back.
- Invest if you can afford it
Once you’ve cleared your debt and built up a rainy day fund of savings you can access in case of emergency, you might want to consider investing as a way to grow your cash more quickly.
Investing isn’t just for the wealthy – we found that you could retire a millionaire by investing just £78 a month.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
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