‘They’re great!’ Premium Bonds unpacked as your chances of winning increase

Premium Bonds: Expert discusses chances of winning prize draw

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The savings option has been heralded by financial expert Peter Komolafe, who unpacked Bonds and their potential benefits. Appearing on ITV’s Lorraine this morning, the finance expert answered the presenter’s question about the vehicle offered by NS&I.

Mr Komolafe said: “Premium Bonds are great, and they have been around for a very long time.

“They recently increased the rate, as we’ve seen the Bank of England base rate increase.

“The Premium Bond rate at the moment is 1.4 percent. It is tax-free, and easy to get hold of.”

Effective from the June 2022 prize draw, the fund rate is being increased from one percent.

It means the odds of each £1 Premium Bond number winning a Premium Bonds prize will also change from 34,500 to one to 24,500 to one.

NS&I has said the prize rate fund increase will see an estimated 1.4 million additional prizes paid out in the next draw.

However, Mr Komolafe warned Premium Bonds are “a lot different” than a typical savings account.

For this reason, they may not be suited to everyone’s financial needs.

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He added: “With Premium Bonds, you’re basically entering into a prize draw where you can win every month.

“The more you have in Premium Bonds gives you the chance to win the bigger prizes.

“The biggest prize is £1million in the draw.”

Presenter Lorraine Kelly complained the matter was being “kept quiet”, even though the odds with Premium Bonds are particularly favourable in the current climate.

Mr Komolafe concurred with the statement, encouraging individuals to look into the option further.

He continued: “People who have money in Premium Bonds have it tax-free.

“This means any money you get in terms of the prize is also completely tax-free and that’s great.

“It’s something different to a savings account. But it isn’t a nailed on rate of return.

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“For those people who like the idea of having money in Premium Bonds and might win £100 here, or £25 there, that could be a good thing.”

However, Mr Komolafe also said there is an element of chance and risk involved with Premium Bonds.

This is because there is no guaranteed return for cash saved into Premium Bonds – with no interest rate.

Premium Bonds, however, can offer Britons peace of mind about their cash.

This is because the savings option is 100 percent backed by the Treasury, protecting money should the worst happen.

Lorraine appears on ITV weekdays at 9am.

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