Premium bond jackpot winners only invested in February

Two lucky Premium Bond holders have each scooped the £1million jackpot with money only invested in February.

One man from County Durham purchased the bond which forms part of a £20,025 holding, meaning a 4,894 per cent return on his outlay.

Meanwhile, the other winner – man from East Riding of Yorkshire – also bought the winning bond in February, and he has the maximum holding of £50,000. 

It means they both won in just the fourth draw the bonds were eligible.  

Top return: The Premium Bonds were bought in February

On top of the two £1 million prizes, there were five winners of the £100,000 prize and 11 winners of the £50,000 prize.

Many people have piled into Premium Bonds during the pandemic, although since prizes were cut, there has been a drop off in money heading in. 

Although the two £1million prizes have remained, the other most valuable prizes were impacted by NS&I’s cuts, with the number of £100,000, £50,000, £25,000, £10,000 and £5,000 payouts falling at least 40 per cent between November and December.

The cuts meant the average ‘prize fund rate’ on Bonds fell from 1.4 per cent to 1 per cent in December, with the amount of money paid out to prize winners falling by £31million compared to November and the number of prizes by 1.1million.

It also meant the odds of any £1 Bond winning were reduced from 24,500 to one to 34,500 to one.

Despite the worsened odds and the economic uncertainty caused by the pandemic, the number of Premium Bonds eligible for the draw have continued to rise monthly, albeit now at a slower rate.

Almost 3.2million prizes worth close to £92million were paid out in this month’s draw with moer than 110 billionbond numbers eligible, up from just circa 109billion in June and 108billion in May.

With £200billion having been stashed away by savers since Covid restrictions began last year, according to Bank of England figures, Premium Bonds have continued to be popular given record low rates of interest currently being offered by other savings providers – the best buy easy-access rate is just 0.5 per cent. 

In March 2020, prior to lockdown restrictions increasing, there were just over 86billion eligible bonds for the draw, meaning roughly £24billion has been put into Premium Bonds since the pandemic began.

The £92million paid out in prizes this month will give savers some reason to cheer, a rise of almost £10 million since the December 2020 low of £82.46million – the first draw after the cuts.

However it is still a long way short of the £113.7million paid out in the November 2020 prior to the cuts coming into force.  

Will there be further cuts this year? 

The continued interest in Premium Bonds at a time when savings rates elsewhere are at all-time lows has led some experts to suggest that Britain’s best-loved savings product could see more cuts this year. 

But despite this trend there appears to be some evidence, at least in the short-term that demand may be waning.

‘The 1.1billion increase in Premium bond numbers this month is the lowest increase for several months,’ said James Blower, founder of Savings Guru. 

‘Typically, Premium Bonds have been seeing monthly growth of £1.5billion to £2billion per month.

‘Given NS&I has an annual target of just £6billion of net growth this would have meant that NS&I would have either had to see large outflows on other products, which given Premium Bonds now account for over 54 per cent of NS&I’s book is unlikely, or they’d have to cut rates to stem inflows.  

‘The reduction of inflows to £1.1bn for the month, if sustained in the coming months, is likely to reduce the need and likelihood of NS&I cutting rates on Premium Bonds.’  

This post first appeared on Dailymail.co.uk