NS&I to increase the Premium Bond prize rate to 3% – here's all you need to know 13 December 2022 at 4:54PM in Savings & investments 52 replies 7.8K views

Band7

Swipe said:

The increase of their Direct Saver to 2.3% is a welcome surprise

Still lagging behind the leaders. And even behind the average PB returns.

Oasis1

eskbanker said:

Oasis1 said:

Will MSE be updating their PB calculator?

They always have when there have been changes before, so no reason to believe they won't again, but they just need to get their pet "post-doctoral cosmology statistician" to crunch the numbers first....

It's a shame they don't say when it was last updated on the webpage, like they do with other articles. I can't tell if it's been updated but the comparisons with savings accounts returns hasn't been updated since 1 Dec apparently.

diystarter7

hi

Many thanks to OP and the two that posted detailed breakdowns.
Thanks

Albermarle

hoc said:

There will be even fewer £25 prizes now after they had already reduced a few months ago. It's becoming more and more a "lottery" and less a "guarantee" for most.

The change could make PB's more attractive for this reason.
As keep getting regular £25 prizes is a bit boring, whilst getting a more irregular stream but with the occasional bigger one thrown in, will be  more exciting/interesting for some.

A couple of months ago, I had my first £100 for a long time, and my OH had her first ever £500 

eskbanker

Albermarle said:

hoc said:

There will be even fewer £25 prizes now after they had already reduced a few months ago. It's becoming more and more a "lottery" and less a "guarantee" for most.

The change could make PB's more attractive for this reason.
As keep getting regular £25 prizes is a bit boring, whilst getting a more irregular stream but with the occasional bigger one thrown in, will be  more exciting/interesting for some.

But my earlier point was that it isn't any more irregular under the new regime - the odds of winning a prize remain exactly the same but they've effectively replaced some £25s with higher value prizes on a one-for-one basis, i.e. you should win exactly the same number of prizes as before but on average they'll be bigger (£60 v £44), so I'm struggling to understand how anyone could see this as less appealing!

Albermarle

eskbanker said:

Albermarle said:

hoc said:

There will be even fewer £25 prizes now after they had already reduced a few months ago. It's becoming more and more a "lottery" and less a "guarantee" for most.

The change could make PB's more attractive for this reason.
As keep getting regular £25 prizes is a bit boring, whilst getting a more irregular stream but with the occasional bigger one thrown in, will be  more exciting/interesting for some.

But my earlier point was that it isn't any more irregular under the new regime - the odds of winning a prize remain exactly the same but they've effectively replaced some £25s with higher value prizes on a one-for-one basis, i.e. you should win exactly the same number of prizes as before but on average they'll be bigger (£60 v £44), so I'm struggling to understand how anyone could see this as less appealing!

You are correct of course, but my point that receiving more bigger prizes, will make it seem more exciting/interesting, than getting just a steady stream of £25's is still valid I think. 

eskbanker

Albermarle said:

eskbanker said:

Albermarle said:

hoc said:

There will be even fewer £25 prizes now after they had already reduced a few months ago. It's becoming more and more a "lottery" and less a "guarantee" for most.

The change could make PB's more attractive for this reason.
As keep getting regular £25 prizes is a bit boring, whilst getting a more irregular stream but with the occasional bigger one thrown in, will be  more exciting/interesting for some.

But my earlier point was that it isn't any more irregular under the new regime - the odds of winning a prize remain exactly the same but they've effectively replaced some £25s with higher value prizes on a one-for-one basis, i.e. you should win exactly the same number of prizes as before but on average they'll be bigger (£60 v £44), so I'm struggling to understand how anyone could see this as less appealing!

You are correct of course, but my point that receiving more bigger prizes, will make it seem more exciting/interesting, than getting just a steady stream of £25's is still valid I think. 

Absolutely, but it just seemed to me that your reference to 'more irregular' was endorsing the strawman that wins would be less frequent!

Theatregoer2

Everyone considering investing in these should be aware that if you have just £5000 in PBs and you die… even if no inheritance tax is due, you leave everything to your partner and you have no other major assets … NS&I will make your representatives get private - which is both costly and hugely time-consuming. It happened to my elderly mum when my dad died and was a nasty shock. 

Theatregoer2

Probate not private

eskbanker

Theatregoer2 said:

Everyone considering investing in these should be aware that if you have just £5000 in PBs and you die… even if no inheritance tax is due, you leave everything to your partner and you have no other major assets … NS&I will make your representatives get [probate] - which is both costly and hugely time-consuming. It happened to my elderly mum when my dad died and was a nasty shock. 

Indeed - it's been mentioned in many previous threads on here and to be fair is also highlighted by NS&I and other sites:

https://www.moneysavingexpert.com/savings/premium-bonds/

Another potential snag I've heard of is that you may need to get probate on the bondholder's estate if the Premium Bond holding is over £5,000, even if it's not needed to release the rest of the estate's assets held with other organisations. For more, see NS&I's guide.

https://www.nsandi.com/help/manage-money-for-others/customers-who-have-died

We will let you know if we need a Grant of Representation (also known as a Grant of Probate or Grant of Letters of Administration) once we receive your completed form. We may ask for this if the customer's total NS&I savings are £5,000 or over. The Director of Savings also reserves the right to request a Grant of Representation for savings of any value.

https://www.thisismoney.co.uk/money/saving/article-4085618/Why-pay-cash-loved-ones-Premium-Bonds-die-NS-demands-probate-just-5k-savings.html