NS&I 'overwhelmingly favours' certain Premium Bonds players

Nicholas Dawson & James Rodger

7 May 2024 at 1:54 pm·2-min read

Premium Bonds "favours" certain players under National Savings and Investments rules, it has been warned. Premium Bonds are the UK's biggest savings product, with more than 24 million people saving over £123 BILLION in them. But the prize rate recently dropped to 4.4% in March and with normal savings paying over 5%, Money Saving Expert warned.

Chris Demetriou, co-founder of Archimedia Accounts, told the Daily Express : "Premium Bonds are a cultural treasure for millions, but there's no denying that pure statistical probability overwhelmingly favours those able to dump £50,000 into the draws over persons of more modest means.

"At the same time though, who among us hasn't daydreamed about what we'd do if our own Bond number got plucked from the millions? Their blend of structure savings with a dash of chance has undeniably captivated the British public.

"It's undeniable that those who can invest tens of thousands of pounds have a statistically much higher chance of winning compared to someone putting in a few hundred here and there." He commented: "Some ideas I've thought could help are capping the maximum number of Bonds held to limit very high chances of winning, combining that with a tiered prize structure, and possibly rewarding longer-term investors with a small return guarantee.

"Spreading out smaller but more frequent wins across modest and significant bondholders alike also seems a sensible adjustment. Overall, the aim should be proportional fairness over rigid equalization. With thoughtful changes, I believe Premium Bonds could continue delighting participants both young and old for years to come while addressing criticisms in a balanced manner that respects all perspectives.

"As with many issues, the ideal solution seldom lies at the extremes, but in pragmatic compromises." Giving his verdict over whether Premium Bonds are worth it, Martin Lewis said: "Premium Bonds are all about your mentality. They do protect your cash, so even if the returns don't look a good bet, it's fine to put a non-significant portion of your money in them, provided you're aware it's more for fun than returns. Before deciding, use the calculator to look at the real odds. If you're willing to take the gamble after that, then it's fine."

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