Premium Bond rates

justwantedtosay

I could have just waited a day or two, couldn't I.
The way I look at the income is that the realistic rate for someone with 50,000 bonds has gone from 1.2% to 2% with a bit more chance of winning a £500 prize [once in 15 years] but £1,000 still probably being a once in a lifetime event and anything better remaining a vanishingly small chance, though better than before [£100,000 every 11,000 years rather than 20,000]. Roughly, you should expect the same number of prizes each year but rather than all being £25, four should be £50 and another four should be £100 so the amount you win each month will vary much more than previously and there'll probably be some very good months, even without winning one of the big prizes. Expect £1,000 a year and hope for more. Rates will go up again before long...
In slightly rounded figures, compared with the start of 2022, your chances of winning a £25 or £1m prize haven't changed but you're a whopping 25 times as likely to win £50 or £100, twice as likely to win £500 or £1,000 and three times as likely to win any of the prizes from £5,000 to £100,000.

Albermarle

justwantedtosay said:

I could have just waited a day or two, couldn't I.
The way I look at the income is that the realistic rate for someone with 50,000 bonds has gone from 1.2% to 2% with a bit more chance of winning a £500 prize [once in 15 years] but £1,000 still probably being a once in a lifetime event and anything better remaining a vanishingly small chance, though better than before [£100,000 every 11,000 years rather than 20,000]. Roughly, you should expect the same number of prizes each year but rather than all being £25, four should be £50 and another four should be £100 so the amount you win each month will vary much more than previously and there'll probably be some very good months, even without winning one of the big prizes. Expect £1,000 a year and hope for more. Rates will go up again before long...

The chance of winning a prize each month has stayed about the same.
. So for most people getting the usual £25 prizes, the effective interest rate has stayed around 1.3%. Just now a few more people (but still not very many) will get a bigger prize than did before.

Like you say there will be more £50 and £100 prizes around but I think now to get even the 2% on average you will have to have the full £50K invested for many years and still have to be a bit lucky.

justwantedtosay

Albermarle said:

Like you say there will be more £50 and £100 prizes around but I think now to get even the 2% on average you will have to have the full £50K invested for many years and still have to be a bit lucky.

No, with average luck and 50,000 bonds, you could reasonably expect to get £1025 a year on small prizes alone - 17x£25, 4x£50 and 4x£100, so actually just over 2%. 

Previously the expectation was 24x£25 a year with a slight hope of a bonus £50 or £100 prize - one of each every 5 years.

For someone with fewer bonds and just getting the occasional win you're right, they probably won't win more often, but one in three of the prizes will be £50 or £100 instead of £25 so they should see an improvement of 66% over time just on these small wins. 

GalacticaActual

c/o Thisismoney.co.uk:

Premium Bonds prizes: September 2022 vs October 2022

Albermarle

justwantedtosay said:

Albermarle said:

Like you say there will be more £50 and £100 prizes around but I think now to get even the 2% on average you will have to have the full £50K invested for many years and still have to be a bit lucky.

No, with average luck and 50,000 bonds, you could reasonably expect to get £1025 a year on small prizes alone - 17x£25, 4x£50 and 4x£100, so actually just over 2%. 

Previously the expectation was 24x£25 a year with a slight hope of a bonus £50 or £100 prize - one of each every 5 years.

For someone with fewer bonds and just getting the occasional win you're right, they probably won't win more often, but one in three of the prizes will be £50 or £100 instead of £25 so they should see an improvement of 66% over time just on these small wins. 

Yes when I see the actual distributions of prizes ( had not seen that before) the big increase in £50 and £100 prizes should bring the average up to 2% ( +the small chance of winning a prize of £500 or over )

ranciduk

On a holding of £25k - would you be likely to get about £500 a year , based on average luck?

eskbanker

ranciduk said:

On a holding of £25k - would you be likely to get about £500 a year , based on average luck?

Yes.