MILLIONS of Premium Bond holders can expect a drop in payouts as the prize fund is slashed.
From next month, all prizes will have fewer winners – except for the lowest of £25 and the £1million jackpot.
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The NS&I prize fund rate will be cut from 4.65 per cent to 4.4 per cent.
But the odds of winning something will remain the same at 21,000 to one for every £1 bond.
Harriet Cooke looks at other prize-linked accounts that might be a more tempting home for your cash.
Premium Bonds – For those who dream big
HOW DOES IT WORK? Premium Bonds don’t offer interest but instead enter you into a monthly draw, with prizes up to £1million.
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You can pay in between £25 and £50,000.
PRIZES: It varies each month, but there’s usually more than one million £25 prize-winners.
Next month, more than four million are expected to win amounts of £50, £100, £500, £1,000, £5,000, £10,000, £25,000, £50,000, £100,000 and £1million.
Two lucky people continue to take the top prize every month, but with the overall fund cut, 85 will likely take £100,000, compared to 91 in February.
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INTEREST RATES: There is a “prize rate” of 4.4 per cent, which means for every £100 customers pay in, typically £4.40 a year is paid out.
But no one is guaranteed to win anything.
ODDS: In the February draw, the odds of a £1 Bond winning any prize were one in 21,000.
A £25 win was one in 118,244, and scooping the £1million jackpot was one in 61.37billion.
By contrast, the odds for the EuroMillions are one in 13 for any prize, and one in 140million for the jackpot.
Credit Union draws – For those on tight budgets
HOW DOES IT WORK? The PrizeSaver draw is managed by the Association of British Credit Unions.
Credit unions are not-for-profit organisations offering local people or selected industries loans and savings accounts.
You can take part if you’re a member of a credit union linked to the scheme.
Find out more about participating unions at prizesaver.co.uk.
You only need £1 to enter the draw and balances are capped at £200.
Every pound saved amounts to one entry in the draw.
PRIZES: The jackpot is £5,000, with a further ten prizes of £50 and ten of £20.
INTEREST RATES: Varies for each union. Commsave Credit Union for postal workers paid a dividend of 1.75 per cent last year.
Others won’t pay any extra on the PrizeSaver balances.
ODDS: Varies depending on how many are entered each month, and how much you have saved.
Last month 1,924,818 tickets were entered into the draw.
Kent Reliance – For high rate chasers
HOW DOES IT WORK? This specialist bank runs a monthly prize draw for customers with savings of £100 or more, or with a mortgage account balance of £1,000 or more.
It is one entry per person.
If a joint account, then the first named account holder will be entered into the draw.
PRIZES: £1,000 for each monthly draw.
INTEREST RATES: Kent Reliance’s Easy Access Account currently pays 5.07 per cent, although you’ll need £1,000 to open it.
ODDS: Kent Reliance has not revealed the odds, but if you like the thrill of a potentially decent win – and if you have £1,000 to save – it’s not a bad place to stash your cash.
Chip prize saver – For people good with phones
HOW DOES IT WORK? Chip is a savings app that links to your bank account, looks at your spending and income and calculates what you can afford to save every few days.
Cash is automatically moved to a savings account.
There are various Chip savings accounts, including one that offers entries to a prize draw rather than interest.
Each month there are £75,000 worth of prizes.
Every £10 you deposit into the prize savings account gets you one entry into the prize draw, and you must have an average balance of £100 throughout the month.
PRIZES: A £10,000 top prize, plus 50 prizes of £100, 100 prizes of £50, 500 prizes of £25 and 4,250 prizes of £10.
INTEREST RATES: None.
ODDS: Varies per month, but in one recent draw a £10 entry had a one in 1,059 chance of winning a prize.
Halifax – For those with cash to stash
HOW DOES IT WORK? Every month, £550,000 worth of prizes are handed out to Halifax and Bank of Scotland customers who hold at least £5,000 in savings and have registered for the draw. Children’s accounts are not included.
PRIZES: Three prizes worth £100,000, 100 prizes of £1,000, and 1,500 worth £100.
INTEREST RATES: Halifax’s top-paying easy access account is the Reward Bonus Saver at 4.2 per cent, although this falls to 1.35 per cent if you make four or more withdrawals in a year.
After one year the account changes to an Instant Saver, which pays 1.45 per cent on balances up to £9,999.
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The top prizes are life-changing but you will lose out on higher rates available elsewhere.
ODDS: Halifax won’t say how many people enter the draws, something that has irritated customers, who therefore can not calculate and compare the odds of winning.
‘I’ve won £400 in just over three years on Premium Bonds’
INSTEAD of playing the lottery, mum-of-two Kate Tynan prefers buying Premium Bonds, which keeps her money safe.
The business coach, who mentors cake-makers and runs thecakebusinessclub.co.uk, says: “I’ve been investing in them since September 2020 and I’ve been lucky so far.
“In the past year I’ve won £100 in January, £50 in September and £100 in June. In total I’ve won £400 in just over three years.”
Kate, 45, inset, from Manchester, currently has £9,000 saved in Premium Bonds but her balance changes if she needs to pay for a big purchase, like a holiday, or tops it up with a lump sum.
She adds: “It’s easy to move money in and out of the account.
“I play the lottery occasionally but once the money is spent you won’t get it back. With Premium Bonds there’s no risk of losing the cash and it feels safer.”
