Premium Bonds are a popular option amongst savers as any money put away is 100 percent guaranteed from any unexpected circumstances. This is because NS&I, the savings bank behind Premium Bonds, is backed by the Treasury. And while there are other safe options through alternative providers, recent research has revealed the NS&I method of saving could be more popular now, than ever before.
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Analysis from MoneySavingExpert.com has shown £1.5 billion worth of Premium Bonds were purchased in April.
This is, as research showed savings rates began to tumble from the state-backed bank.
The savings have now hit a 14-year record high, as this is the highest number of bonds bought in one month since December 2006.
14 years ago, a special 50th anniversary draw from NS&I with a promise of five £1million winners captured a wide audience, and generated £2billion worth of bonds.
In April, NS&I announced it would be dropping its plans to slash its interest rate and prize rate fund.
It had originally planned to drop rates from 1.40 percent tax-free, to 1.30 percent.
However it ditched this intention due to what the savings company described as an “unprecedented time”.
The odds of any £1 Bond number winning any prize will not reduce to 26,000/1 and remain at 24,500/1.
Helen Saxon, Banking Editor at MoneySavingExpert.com commented on the record high in this method of saving
She said: “With many savings rates plummeting in recent months, and NS&I bucking the trend by cancelling its planned rate cut, it’s no surprise that people are flocking to Premium Bonds.
“NS&I is also top of the table for easy-access savings rates at the moment with its 1.16% Income Bonds. This is unusual, as NS&I’s state-backed status means it’s not really meant to sit at the top of tables offering rates the commercially-owned competition can’t hope to match.
“Yet these are not normal times, and with the state’s furlough and self-employed support schemes having paid out more than £20 billion so far, it’s likely NS&I has been told to raise more cash through its savings products and Premium Bonds to cover some of this borrowing.
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“If you do have money to save and you’re looking for a decent rate and thinking about Premium Bonds, it’s important to remember that the advertised 1.4 percent prize rate is just an indication, and it’s possible you could win absolutely nothing. But, with savings languishing at very low rates, if you’re happy to take a chance then Premium Bonds aren’t currently a bad place to put your money.”
Premium Bonds have been issued in the UK since 1956, meaning they predate the famous National Lottery draw.
They are a type of lottery bond which the government pays interest into, with a monthly prize draw providing select bondholders with a payout.
It is estimated approximately 21 million Britons own Premium Bonds, and because this is a lottery bond, the more you buy, the greater your chances of winning.
The results of the June prize draw were revealed today, and lucky winners could be substantially richer.
The first millionaire winner for this month was a woman from Nottingham, with the winning number 292ME808065.
She had a holding of £50,000, but the specific bond that won it for her was valued at £25,000 and purchased in January 2017.
The second millionaire was a man from Stoke-on-Trent, with the bond number 384CP325978.
He had a total holding of £27,500, with the winning bond purchased recently in February 2020 and valued at £14,000.
Of course, it is important to know there are other substantial prizes, and others can check if they have won by visiting the NS&I website to check their bond numbers.
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