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Premium Bonds: What are your odds of winning August’s £1million jackpot? | Personal Finance | Finance

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Every month, some lucky individuals can win upwards of £1million because of the National Savings and Investments (NS&I) prize lottery. Recent changes to the savings product’s prize fund rate mean that the percentages of somebody winning the jackpot have now modified.

For this month, two winners received the £1million prize with many savers wondering if they’ll do the identical in August via NS&I’s lottery.

Earlier his yr, the financial institution revealed it was climbing the prize fund rate for Premium Bonds.

After this increase, the savings product’s prize fund rate was raised from one percent to 1.40 percent.

This hike was introduced as of June 2022’s prize draw and can proceed to be the account’s rate going forward.

READ MORE: State pensioners may give you the option to extend sum by as much as £14.75 weekly

Many individuals who spend money on Premium Bonds at the moment are wondering if their odds of winning the £1million jackpot has increased since this transformation.

In comparison with savings products with traditional banks, no normal interest is earned on the account as there’s as a substitute a monthly prize draw for money prizes.

Probably the most an individual can take home from Premium Bonds in a single month is £1million, with two jackpot payouts often given out to 2 bond holders a month.

Among the many other sizeable money prizes someone can win through NS&I’s investment product are £100,000, £50,000 or £25,000.

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Before the prize fund rate rise, the percentages of every £1 Premium Bond number winning a prize was 34,500 to 1.

After the NS&I made a decision to hike the speed, the percentages have now modified to 24,500 to 1 in a boon for savers.

Which means bond holders will see their odds improving of taking home one in every of the money prizes every month.

NS&I estimated that the hiked prize fund rate would lead to an additional 1.4 million prizes paid out in last month’s draw.

Sarah Coles, a senior personal finance analyst, Hargreaves Lansdown, warned that individuals need to concentrate on how NS&I’s product works to find out what their odds of winning might be.

Ms Coles explained: “It is advisable understand what you’re giving up. You don’t make any interest on money in Premium Bonds.

“And while at a time of low inflation chances are you’ll feel it is a small price to pay for the prospect of a giant win, while inflation is running so hot, it means the spending power of your money is being eroded way more quickly. It means holding Premium Bonds comes at a better cost.

“You furthermore mght need to understand that the prize rate is just not similar to the returns you may expect.

“When you hold the bonds you won’t make 1.4 percent. Those with better-than-average luck will make more, and people with less luck can go many years and not using a win.”

She added: “In a mean yr, someone with £1,000 within the bonds will win nothing. It’s value knowing the probabilities of a win too.

“While the prospect of any win in any respect with a £1 bond is 24,500, in May, the probabilities of winning £1 million were 1 in 58.91 billion – which is vanishingly small.

“Even after the prize rate changes, there’ll still only be two million pound prizes, so the percentages of winning one million haven’t improved – in truth as more people buy more bonds, unless the variety of million pound prizes increases, the percentages will worsen.”

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