Bigger Premium Bonds prizes makes them more attractive, says LEE BOYCE – but is it time to ramp up £1m jackpots?

In the Premium Bonds draw next week, there will be ninety £100,000 prizes and a hundred and eight one £50,000 prizes.

That is some jump from just 15 months ago, when there were just six £100,000 prizes and 11 £50,000 ones.

For me, that leap makes the much-loved National Savings and Investments products far more attractive and creates a seriously tempting case to divert more cash into.

It has only been since the underlying rate on Premium Bonds has been rising that I have been sticking money into them – they didn’t appeal to me all that much before.

There have been seven rises since June 2022, taking the prize rate from 1.4 per cent to 4.65 per cent.

And currently, like millions of others I suspect, I’m in a bit of financial flux.

It comes as I decide where to split my savings and investments; that’s not just because of the better Premium Bonds underlying rate but also decent savings rates elsewhere, combined with an urge to overpay the mortgage while it remains at an ultra-low rate.

Not bad problems to have.

But, it’s that lure of more five or six figure prizes, while being able to take your stake out, that makes me more and more drawn to Premium Bonds like a moth to a flame.

It’s akin to being part of the lottery, but without the same risks of losing your stake.

Yes, depending on how much you’ve got saved, you might not win from one month to another – but having skin in the Premium Bonds game with juicy prizes is a hard to come by financial thrill.

While those £10,000-plus prizes have risen substantially in recent months – and the number of £25 prizes has been cut – the odds on winning the fabled £1million have grown longer.

That’s because since 2005, there have been two £1million jackpots each month (excluding a few special one-off draws).

That first £1million jackpot was launched in 1994. So, is it time for NS&I to consider ramping that jackpot prize up, or adding a third £1million prize?

It could cut five £100,000 prizes and 10 £50,000 prizes to fund a third prize, or bump the two up to £1.5million?

After all, £1million in 1994 is £2.4million today, according to the This is Money historic inflation calculator.

I wonder if it’s on the mind of new NS&I chief executive Dax Hawkins.

Despite the still long odds of scooping that jackpot, currently, the rest of the big prize odds look attractive to me. If you held £10,000 in Premium Bonds over one year, there is a one in 1,871 chance of winning £25,000.

There is a one in 4,325 chance of winning £50,000 and one in 12,669 chance of scooping £100,000 (compared to one in 357,532 of winning £1million). With average luck, you’d scoop £250.

With a £25,000 pot, you have a one in 741 of doubling your pot, a one in 1,689 of winning £50,000 and one in 4,730 of getting £100,000. With average luck, you’d scoop £750.