Why you’ll wait 55,000 years to win Premium Bond jackpot
MILLIONS of savers with cash in Premium Bonds will see the typical payout fall next week.
If you have average luck in the random monthly draw, your typical return will drop from 1.25pc a year to 1.15 pc a year on May 1.
There will still be two £1 million prizes up for grabs, generated by the Electronic Random Number Indicator Equipment (ERNIE), but the number of £100,000 prizes will fall from three to two. The number of £25,000 prizes will be cut from 13 to nine, and NS&I is also withdrawing 103,000 prizes at the £100 and £50 level.
So, what are your chances? If you invested the maximum £50,000, you could justifiably feel upset if you didn’t win at least a dozen £25 prizes a year.
But even if you invested the top sum for an entire lifetime, you’re unlikely to win more than one £1,000 prize — let alone the £1 million jackpot.
Here, we explain the numbers behind Britain’s most popular savings deal . . . £64m CASH that will be paid in prizes from May. In April, the total was £71 million. If you have average luck, your return falls to 1.15 pc a year from 1.25 pc. 30,000 to 1 ODDS of a £1 bond winning one of the 2,219,493 prizes on offer each month. This is down only slightly on the 2,268,165 figure for April, meaning the odds of winning have remained roughly the same. 2,172,842 NUMBER of £25 prizes to be won each month from May — up 55,124 from the 2,117,718 in April’s draw. from,May51 000 NUMBER of £50 and £100 prizes to be won — down from 72,000. £50,000 THE maximum you can invest in Premium Bonds. It gives you the best chance of winning a prize each month because each £1 bond has an equal chance of winning in the randomised draw. The more you have, the more chances. 30 AGE you would be to have won just one £25 prize, given average luck and the minimum initial investment of £100 in Premium Bonds since your fifth birthday. 19.6 THE number of £25 prizes you will win each year on average with £50,000 invested, according to FT columnist Paul Lewis, who hosts Radio 4’s Money Box personal finance show. Before the changes, the figure was 18.7, says NS&I. 5 AVERAGE wait in years to collect a £50 or £100 prize if you have the maximum amount of bonds, up from less than two years before the changes. 87 PREPARE to wait this number of years, on average, to win a £1,000 prize — even with £50,000 invested. Before the changes, you had to wait 80 years. 2 , 361 NUMBER of years ago you would have had to invest the maximum £50,000 to have won just one £5,000 prize so far, based on today’s prize fund and prices. That’s 343 years before the birth of Christ. 4 , 825 YEARS ago, the Great Pyramid at Giza was built. If you’d invested £50,000 at the time, you’d have won one £10,000 prize by now. 12,500 YEARS ago, the last of the woolly mammoths strolled the Earth. If you could have bought £50,000 in Premium Bonds way back then, you would have won just one £25,000 prize so far, based on today’s prize rates. 55,000 THE number of years it takes to win the £1 million jackpot, on average, with the maximum £50,000 invested. That takes us back to the Neanderthal era. On the plus side, you’d also have won one prize of £100,000. 0.98 IN PERCENTAGE terms, that’s the average tax-free rate of return if you only ever win £25 Premium Bond prizes, says financial expert Mr Lewis. If you normally pay tax on your savings, that’s the same as a taxable bond paying 1.22 pc for basic-rate payers and 1.63pc for higher-rate payers. 2 , 677 YEARS ago, the prophet Ezekiel was alive. If you had invested £100 then, you wouldn’t have won anything bigger than one £100 prize by now. 28m THE number of years you would have to wait to win £1 million with average luck and just £100 in bonds. It’s only an average — like all the figures here — so you could strike gold earlier. 66m FOR each £10 in Premium Bonds, this is how long you’d wait for a single £25,000 prize. Dinosaurs were wiped out 66 million years ago.