Bigger Premium Bonds prizes makes them more attractive, says LEE BOYCE - but is it time to ramp up...

In the upcoming Premium Bonds lottery, there will be a total of ninety prizes worth £100,000 each along with one hundred and eight additional prizes worth £50,000 each.

That is quite a leap from merely 15 months ago, when there were only six prizes worth £100,000 and eleven prizes worth £50,000.

In my opinion, this jump enhances the appeal of the popular National Savings and Investments offerings and presents a highly alluring argument to allocate additional funds towards them.

I've only started investing in Premium Bonds recently, when the base interest rate went up. Before that, I wasn't particularly interested in them.

As someone who has longed for grand aspirations, the addition of additional £100k and £50k rewards in the past year has tremendously enticed me towards Premium Bonds.

Since June 2022, there have been a total of seven increases, causing the interest rate to surge from 1.4 percent to 4.65 percent.

At present, similar to countless individuals I assume, I find myself experiencing some financial instability.

I'm currently faced with the task of determining how I should distribute my savings and investments. This decision is not solely influenced by the appealing interest rate offered by Premium Bonds. It also takes into consideration the attractive savings rates offered elsewhere, along with my desire to make additional mortgage payments while the interest rates are exceptionally low.

These are problems that are not particularly troubling or unfortunate to have.

However, it's the attraction of larger prizes in the range of five or six figures, coupled with the ability to withdraw your investment, that increasingly captivates me towards Premium Bonds, like a moth helplessly drawn to a burning flame.

It's like being involved in a raffle, but without the same chances of losing your investment.

Certainly, the amount you have saved will determine whether you win or not every month. However, experiencing the excitement of participating in Premium Bonds and having the chance to win attractive prizes is a rare and exhilarating financial opportunity.

Despite the considerable increase in prizes of £10,000 or more in recent months, there has been a reduction in the number of £25 prizes. As a result, the chances of winning the highly sought after £1million have become even slimmer.

That's because starting from 2005, there have been two jackpots worth £1million awarded every month (with the exception of a couple of unique draws).

The initial £1million reward was introduced back in 1994. Therefore, should NS&I contemplate increasing the value of the jackpot or including another £1million prize?

It has the potential to reduce the number of five £100,000 awards and ten £50,000 awards in order to provide funding for a third award, or alternatively increase the value of the two prizes to £1.5 million each.

In the end, a sum of £1million in 1994 equates to £2.4million in today's value, as indicated by the This is Money tool for accounting for historical inflation.

I ponder if it crosses the thoughts of the recently appointed NS&I CEO, Dax Hawkins.

Even though the chances of winning the jackpot are still slim, at present, the remaining probabilities of winning a substantial prize seem appealing to me. If you had £10,000 invested in Premium Bonds for a year, there is a 1 in 1,871 likelihood of winning £25,000.

The likelihood of winning a cool £50,000 stands at just 1 in 4,325, while the chances of bagging a whopping £100,000 are 1 in 12,669 (rather than the slim odds of 1 in 357,532 for winning £1 million). On an average scale of luck, you could walk away with a decent £250.

You have a chance of doubling your £25,000 pot at a rate of one out of 741. The odds of winning £50,000 are one out of 1,689, and the chances of getting £100,000 are one out of 4,730. In general, if luck is on your side, you can expect to win around £750.

Additional August 2023 champions

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