Exact date for big change in Premium Bonds – see how it affects your chances
There's a BIG change coming to Premium Bonds next month and it could affect your chances of winning.
The NS&I prize fund rate will be reduced from 4.65% to 4.40% in March 2024, while the chance of winning remains 21,000 to one per £1 bond number.
The number of top prizes of £1 million is expected to remain at two, but the number of winners of the second best prize of £100,000 is expected to drop by six.
Despite the decrease in the prize money percentage, it remains higher than the March 2023 prize draw.
In March last year the percentage was 3.30 percent and the odds were 24,000 to one.
It is predicted that all prizes expected at the lowest level of £25 will have fewer winners in March.
The number of £25 winners is expected to rise to around 1,435,338, up from 1,037,784 last month.
It is predicted that there will be just over 72,000 fewer winners in total in March than in January 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 trying to “strike a balance between the interests of savers, taxpayers and the wider financial services sector.”
NS&I retail director Andrew Westhead said: “These changes reflect our need to balance the interests of our savers, taxpayers and the stability of the wider financial services sector.”
“In a dynamic savings market, it is important that our rates are set appropriately relative to our competitors as we strive to achieve our annual net funding target.”
“Following these changes, the March Premium Bonds draw is expected to pay out more than 5.7 million tax-free prizes, totaling more than £444 million, to savers across the UK.”
What are premium bonds?
Premium bonds are a type of savings account that do not offer interest payments like conventional accounts.
Instead, you get the chance to win a prize worth up to £1 million every month.
Premium bonds can be purchased from the government-backed National Savings and Investments (NS&I), which also offers a variety of other savings products.
Because Premium Bonds are government backed, your money is safe and there is no risk of losing your money.
You can put money in and take it out whenever you want, but you need to put in a minimum of £25 to start and you can invest up to £50,000.
Every €1 you put into Premium Bonds will be entered into the monthly prize draw.
What are the Premium Bond prices?
The draw is held every month and the winning number is chosen by a computer called ERNIE (which stands for electronic random indicator equipment).
There are three types of prizes:
- Higher value prizes of £5,000, £10,000, £25,000, £50,000, £100,000 and £1 million
- Medium prizes of £500 and £1,000
- Lower value prizes of £25, £50 and £100
How likely am I to be a winner?
The odds of winning a prize with an individual bond are currently 21,000 to one.
Each bond has an equal chance of winning and the more you buy, the more your chances improve.
Most Premium Bond savers will find that their investments can't keep pace with inflation, but it's hard to find savings accounts that also beat inflation.
You can check your chances, depending on how many bonds you have and how long you will hold them, using MoneySavingExpert.com's handy calculator.
This makes it easier to see if Premium Bonds are right for you, or if you would 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 can benefit by saving into Premium Bonds.
How do I check if I have won??
You can use the NS&I Premium Bond price checker online to see if your numbers have appeared.
You will need to know the numbers of your Premium Bonds which can be found on your Bond file or online account.
If you have lost your numbers, you can contact NS&I and request them.
There is also an official app for iPhones And for Androids also for checking prices, and even an app for Amazon Echo, which means you can just ask Alexa.
For this you must use your NS&I number instead of any Premium Bond number.
It consists of 11 digits and should appear in every conversation with NS&I.
You don't have to check your figures all the time as you can have prizes under £5,000 paid straight into your bank account, or buy more Premium Bonds automatically.
For higher value prizes worth over £5,000, NS&I will contact you by post and if you win the £1 million jackpot, someone will come and let you know!
Please note that NS&I no longer sends prize checks by post.
Before signing up, it's important to check how it compares to the rest of the market to ensure you're getting a good deal.
In other banking news, a major bank is offering customers a £175 cash bonus, but you need to act fast.
Another major bank is giving away £200 in free cash in one simple move.
Seven tips to convert pennies into pounds
You've been saving your money all wrong, here are our top tips
Before you start saving money, it is best to get rid of your expensive debts first.
This is because interest on loans or credit cards increases faster than you can earn interest on a savings account.
It sounds obvious, but saving money is a lot easier if you know what you're working towards.
Whether it's a new laptop, a summer vacation, or retirement, it's important to have a goal in mind.
Find the best savings account
Interest rates are very low, making it harder to grow your money. So you really need to find the best savings account you can find.
- Take on a savings challenge
A money saving challenge is a great way to really boost your habit.
The small amounts saved each day can really add up over time.
If you have to do this manually, it's easy to forget to move your money into a savings account every month.
Set up a monthly direct debit from your bank account to your savings account. This way you don't have to worry or risk putting it off.
Round-ups are a good idea if you also make a lot of small trades.
Some banks and apps will automatically round up your purchase to the nearest pound and transfer the difference to a savings account.
Tracking your expenses is a must for anyone looking to develop good money habits.
Add up your monthly expenses for essentials, then determine where you can cut back.
- Invest if you can afford it
Once you've paid off your debts and built up a rainy day savings fund that you can access in an emergency, consider investing as a way to grow your money faster.
Investing isn't just for the rich: we discovered that you can retire as a millionaire by investing just $78 a month.
Do you have a money problem that needs to be solved? Get in touch by emailing money-sm@news.co.uk.
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