Out of luck?

Premium Bond cuts

The Daily Telegraph - Your Money - - FRONT PAGE - Amelia Mur­ray

Bri­tain’s most pop­u­lar sav­ings ve­hi­cle, in which peo­ple have in­vested £66.7bn, is to cut its payout rates from May 1. As a per­cent­age of all the money held, Premium Bond prize prizes will fall from 1.25pc to 1.15pc per year.

But the com­plex way in which monthly prizes are dis­trib­uted – with two £1m jack­pots per month as the big­gest prizes, and more than two mil­lion £25 prizes paid – means the odds of win­ning with any £1 bond are tricky to cal­cu­late.

In to­tal, 2,224,513 prizes of all val­ues are cur­rently paid per month. From May, this to­tal will drop only slightly to 2,219,493. So the odds of any £1 bond win­ning any prize of any value will re­main roughly con­stant at one in 30,000.

But in or­der to achieve the over­all cut in payout, prizes in cer­tain bands have been rad­i­cally cut, as seen in the ta­ble be­low.

The big­gest falls in the num­ber of prizes ap­ply to the £25,000, £10,000 and £5,000 bands. The num­ber of the very small­est prizes of £25 has in­creased from 2.1 mil­lion to 2.2mil­lion. Prizes are dis­trib­uted tax-free.

Where the num­ber of prizes has fallen the odds of win­ning have length­ened.

The odds of any bond win­ning any prize will be roughly con­stant

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