When will NS&I increase premium bond prize fund rate?

S_uk

I don't think I will get rid of all my premium bonds if the prize rate doesn't increase as I do like checking to see if I've won anything at the start of each month, but I will transfer a good chunk elsewhere as the rates increase and the gap gets wider.

justwantedtosay

Albermarle said:

That said, for all I know I could get a visit/call from Agent Million imminently and this is all a moot point.. 

I would not wait by the phone though, as someone with the full £50K  will on average win a Million about every 40,000 years.

I did the sums and came to the conclusion that a £1m win was a once every 100,000 year event with 50k bonds, and even a £1,000 win was a once in a lifetime thing. £5,000 once a millennium. With a 1.4% rate I reckoned that you could expect to average two £25 wins a month, so a 1.2% return, with any bigger wins being very unlikely. A £50 win, which is hardly life changing, should come just once in every five years. Of course, my sums might be wrong, and two people do win a million every month - it's just very unlikely that one of them will be you or me.

Albermarle

justwantedtosay said:

Albermarle said:

That said, for all I know I could get a visit/call from Agent Million imminently and this is all a moot point.. 

I would not wait by the phone though, as someone with the full £50K  will on average win a Million about every 40,000 years.

I did the sums and came to the conclusion that a £1m win was a once every 100,000 year event with 50k bonds, and even a £1,000 win was a once in a lifetime thing. £5,000 once a millennium. With a 1.4% rate I reckoned that you could expect to average two £25 wins a month, so a 1.2% return, with any bigger wins being very unlikely. A £50 win, which is hardly life changing, should come just once in every five years. Of course, my sums might be wrong, and two people do win a million every month - it's just very unlikely that one of them will be you or me.

Your post prompted me to check my figures, A quick google shows there are different figures quoted for the chance of winning a Million, depending on the source. (figures quoted are for £1 bond for one month )
Love Money says one in 56.2 Billion
MSE says one in 59.1 Billion
The Times says one in 49 Billion.

The change in overall interest rate has made no difference as there are still two Million Pound prizes each month ( the other prizes have increased in number instead) so the chances will change depending on the number of PB's in the draw.

According to another thread there 119 Billion bonds going into the monthly draw , so the MSE figure looks the most accurate currently.

So 59 Billion divided by the full £50K = a one in 1.18 million chance of winning a Million each month, so a one in 98,333 chance of winning once a year, so you are right in that someone with the full £50K would have to wait on average nearly a 100,000 years to win a Million. ( I guess I must have wrongly divided by two at some point for my figure)

Daliah

Increased today https://twitter.com/paullewismoney/status/1574677641697042437?s=46&t=Iok1il_t8Q6KSNpYOSKd7A

Daliah

A bit more on it now

wiseonesomeofthetime

Confirmed on their website: https://www.nsandi.com/interest-rates

My current holding is £0.

Based on past performance, I am not sure if I would relocate my money there vs a guaranteed return for £50k

Albermarle

The chance of winning one prize each month has hardly changed, but the chance of it being a bigger one has increased.
However the chance of winning a bigger prize is still very small.

So the effect will be that the large majority will still see an effective interest rate of around 1.3% but there will be more 'lucky' people who will win a bigger prize ( but still only a very small number) 

Thirty9

I was thinking about cashing-in my bonds. This change has stopped that from happening.

Sg28

Thats enough to keep mine there. I pay tax on interest so im happy wih that for now.

km1500

so the next question is when will they increase other rates eg direct saver currently paying 1.2%