Warning to Premium Bonds savers over how many have never won a prize
Savers have on average £5,185 in Bonds which with average luck will not win any prizes.
Research has found two thirds of Premium Bonds holders, or 14.4 million people, have never taken home a prize.
The average holding for winners between June 2023 and May 2024 was £23,047, which is more than four times the average holding amount, at £5,185.
Previous research from Martin Lewis' Money Saving Expert suggested a saver needs to hold at least £10,000 in Premium Bonds to have a good chance of winning, with the prize fund rate currently at 4.4 percent.
Laura Suter, director of personal finance at AJ Bell, said: "£126 billion is held in Premium Bonds, meaning there is a huge amount of money making no return whatsoever when savers could otherwise be raking in interest in excess of 5 percent if they were to shop around for other cash products on the market."
She warned there is a "pretty decent chance" you will not win any prizes if you have just the average £5,185 in Bonds.
Ms Suter said: "Savers might be better off considering other options with their cash savings. For example, if they took more risk and invested the money instead, putting that £5,185 in the Fidelity Index World global tracker fund 10 years ago, they’d be sitting on a pot worth £16,689 today.
"Of course the lure of Premium Bonds is that you might win the big, £1million prize, but these figures show that it’s very unlikely if you have a small amount saved in the bonds.
"What these figures make clear in this extended period of higher interest rates on cash and a cost-of-living crisis is that savers will often be better off exploring the various inflation-beating cash rates on offer elsewhere in the market rather than leaving it to chance in a Premium Bonds account."
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At the time of writing, there are several easy access and fixed rate accounts offering rates above five percent.
A person can hold up to £50,000 in Premium Bonds and people often choose to reinvest their winnings to increase their chances of winning again.
A saver recently contacted NS&I with a question about when Bonds become eligible to go into the monthly prize draw.
They asked: "I am about to open a Premium Bonds account. Could you tell me if the account needs to be active and Bonds allocated before the one month waiting period starts?"
An NS&I representative said in response: "Premium Bonds must be held for a full calendar month before they are entered into a prize draw.
"Once they have been held for a full calendar month, they will be eligible to win prizes on the following draw."
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