Another record month for Premium Bond buys: Billions more are now in the draw – does it make the odds of winning a £1m jackpot far slimmer?
- Savers have poured billions of pounds into Treasury-backed NS&I since March
- The bank is effectively propping up savings rates and hoovering up billions
- There were 6.2bn £1 Premium Bonds bought between March and June as savers faced with paltry interest rates take a punt in the hope of winning £1m
There were a record 1.745billion more Premium Bonds in this month’s prize draw as Treasury-backed National Savings & Investments continues to hoover up billions of pounds from Britain’s savers.
More than 6.2billion more £1 Bonds have been bought in just four months between March and June, with record low savings rates meaning savers may prefer to stash their money in the tax-free savings products in the hope of winning £1million rather than earn paltry interest rates elsewhere.
Although the average prize fund rate is 1.4 per cent, which comfortably beats regular easy-access savings rates, many savers will end up winning nothing.
It also means that the chances of winning one of the two £1million jackpots have lengthened from 40.99billion a year ago, to 46.33billion to one.
NS&I is the sole remaining safe haven for savers after months of brutal interest rate cuts
Billions has poured into Britain’s best-loved savings product since the coronavirus lockdown left millions with spare savings at the end of each month, with Premium Bonds and other NS&I accounts being among the sole safe havens in an otherwise miserable year for savers.
Figures from the Treasury-backed bank reveal there were more than 6.2billion more £1 Bonds in August’s draw than there were in April, the last draw before Bonds bought in the first month of lockdown in March became eligible.
Bonds become eligible after they have been held for a full month, meaning the extra £1.745billion worth of Bonds in August’s draw were bought in June.
Although the figure also includes reinvested winnings, with savers able to hold up to £50,000 worth of Bonds, it still suggests savers poured vast sums into Premium Bonds in June.
|Total Premium Bonds in the draw
|New Bonds in the draw
It is the largest increase in eligible Bonds since December 2006 and a record for any month with a normal draw, topping last month’s then-record increase of 1.698billion more Bonds.
Separately, figures from the Bank of England found households saved another £11.6billion in June, having already saved £57billion in the three months beforehand.
The number of new Bonds in the draw has increased every month since May, when there were 1.233billion more eligible Bonds than there were in April’s draw.
In the 10 months between May 2019 and February 2020, an average of just over 500,000 new Bonds were bought each month, a figure dwarfed by the inflows seen over the last four months.
Treasury-backed NS&I revealed last month that £19.9billion of savers’ money was invested between April and June this year, after record cuts to savings rates left its accounts at the top of the best buy tables with very few alternatives.
As well as the Premium Bonds, its Income Bonds pay 1.15 per cent monthly interest, its Direct Saver 1 per cent and its Direct Isa 0.9 per cent.
NS&I announced it now holds £193.7billion and has been given the green light from the Treasury to raise as much as £35billion in 2020-21, nearly six times the £6billion it was originally supposed to raise before the coronavirus upended Britain.
|Number of prizes in August 2019
|Odds of any £1 Bond winning
|Number of prizes in August 2020
|Odds of any £1 Bond winning
|40.99bn to 1
|46.33bn to 1
|13.66bn to 1
|13.24bn to 1
|8,197.92m to 1
|7,127.93m to 1
|3,564.32m to 1
|3,309.4m to 1
|1,490.53m to 1
|1,383.03m to 1
But the increase in customers has also seen an increase in complaints. There were 2,384 in May, up from 1,433 the same month the year before, while 79 per cent of the 503 reviews left on the website Trustpilot are one star.
Several complain of call centre wait times of up to 40 minutes, with NS&I urging customers to manage their savings online during the pandemic if they can, saying it is receiving more calls than usual and taking longer to help customers.
August’s jackpot winners were a woman from Cumbria who held £5,900 in Bonds and bought the winning number a decade ago, and a man from outer London with a £20,300 holding who bought the winning Bond in June 2018.
Close to 3.8million prizes worth £108.1million were handed out in total in August by NS&I’s random number generator Ernie. Each £1 Bond has a 24,500 to 1 chance of winning a £25 prize.
Premium Bonds Winners
|Value of bond
|Hereford and Worcester
More August 2020 winners
There are typically six prizes of £100,000 each month with a more than 1 in 10billion chance of winning, and 12 of £50,000 with odds of around 1 in 5billion.
Savers who want to know if they’ve won can check with This is Money’s prize checker.