Chances Of Winning On Premium Bonds Plummet

(Telegraph) – THE CHANCES OF WINNING A PRIZE on the Premium Bonds has dropped by more than a third in the last 20 years, according to new Government figures.

In 1992, people with £500 in bonds had a one in 23 chance of winning the lowest, meaning they would receive a payout once every two years on average.

However, this has now fallen to one in 73, equating to one win every six years.

A leading financial adviser said Premiums Bonds could no longer be recommended unless the investor was in the higher rate of tax and wanted a temporary home for a large sum of money.

He described them as ‘almost a bit of fun,’ rather than a serious investment.

Earlier this year, the chances of winning the £1 million jackpot were halved when one of the two top prizes was withdrawn, while the minimum prize was cut from £50 to £25.

This decision was taken because falling interest rates have cut the total prize fund dramatically: in January 2007 it was £114 million, but this month’s figure will be just £33.8 million.

Danny Cox, head of advice at financial advisory firm Hargreaves Lansdown, said many people had premium bonds because they had been given them as children and simply held on to them.

‘Lots of people have Premium Bonds just because they always have. I think they have always been almost a bit of fun to an extent because you are not guaranteed any return — even when the odds of winning were better,’ he said.

‘I still think Premium Bonds have a place, but they tend to be better for higher-rate taxpayers who have healthy cash balances already.

‘They certainly aren’t as popular as they were.’

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  1. […] … (20/07/2009) – Chances Of Winning On Premium Bonds Plummet […]

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