Windfall Bonds: What are my chances of winning £50k prize?

I’m interested to know how the Family Building Society operates its Windfall Bond, as I’m considering making the £10,000 savings deposit required. 

I have read the ‘rules’ several times and do not fully understand them. 

It seems not all prizes are likely to be awarded every month, and that this depends on how ‘tickets’ are awarded. 

Although winners’ names are published, the value of the prize is not disclosed. I am wondering, it is possible that the top monthly £50,000 prize has rarely been awarded, and possibly never awarded? via email

The Windfall Bond has a maximum capacity of 15,000 open accounts, each holding £10,000 – but the rules around how often the top prize of £50,000 is awarded confused our reader 

Ed Magnus of This is Money replies: Most people won’t have heard of the Windfall Bond, or indeed its provider, the Family Building Society.

When it comes to savings products offering customers monthly prize draws, Windfall Bonds are very much the baby brother of NS&I’s Premium Bonds.

Britain’s most loved savings product, which began in 1956, is held by roughly 22 million people, and more than 113 billion £1 bonds were eligible for last month’s NS&I draw.

By comparison, Family Building Society’s Windfall Bonds, which began in 2015, have only £127million stashed away in them and only a few thousand customers.

Money held with Family Building Society, which is based in Epsom, Surrey, is covered under the Financial Services Compensation Scheme protection up to £85,000.  

Like Premium Bonds, Windfall Bonds offer a number of monthly prizes to bond holders, which are all tax free. They can only be purchased online. 

Premium Bonds only require a minimum investment of £25 to enter the draw, Windfall Bonds require a far heftier £10,000 deposit.

There is no maximum cap on Windfall Bonds, subject to availability, whereas with Premium Bonds you can deposit a maximum of £50,000.

Family Building Society winners
Prize Jan 21 Feb 21  Mar 21  Apr 21  May 21  Jun 21  Jul 21  Aug 21  Sep 21  Oct 21 
£50,000 1
£10,000  2
£1,000  12  11  14  10  11  10  10  11  11 
Number per month  17  13 18  15  16  16  15  13  15  15 
Value per month  £87,000  £23,500  £39,000  £85,000  £78,500  £87,500  £77,500  £84,500  £36,000  £28,500 

There are currently 12,700 Windfall Bond accounts, each holding £10,000 – but many bond holders have more than one account.

The number of windfall Bonds currently being entered into the monthly prize draw is 15,000, and the remaining 2,300 spaces are filled by blank tickets. 

This could reduce if more accounts joined the draw, but Family Building Society says it does not impact on the probability of winning.

Each qualifying £10,000 bond is entered into a free draw for a chance to win one of 21 monthly prizes. There are fifteen worth £1,000, three worth £2,500, two worth £10,000 and one £50,000 prize.

Each qualifying entry can win only one prize each month, and according to the building society each individual Windfall Bond entered into the draw has a one in 714 chance of winning a prize in any given draw.

This is based on the fact there are 21 selected prize tickets, and 15,000 tickets entered into each draw. 

With one Windfall Bond, The Family Building Society claims your chance of winning a prize at least once in a year equates to approximately 1 in 60.

Premium Bonds offer much bigger money, with two £1 million prizes and five £100,000 prizes – but the odds of winning appear to be less promising. 

According to numbers crunched by data scientist Andrew Zelin on behalf of the Family Building Society, savers who put £10,000 in Premium Bonds would have to wait 11,926 years on average for a 50:50 chance of winning the £10,000 prize.

Windfall Bonds versus Premium Bonds
Deposit Prize FBS Windfall Bond: Years to wait for 50:50 chance of win   NS&I Premium bonds: Years to wait for 50:50 chance of win
£10,000 £1,000 58  347 
£10,000  £10,000  433  11,926 
£10,000  £50,000  866  58,544 
Source: Andrew Zelin, data scientist 

However, from a £10,000 Windfall Bond holding, a saver would have to wait on average 433 years to win the £10,000 prize.

On top of the prizes, each Windfall Bond is also guaranteed to receive interest at the Bank of England bank rate, currently 0.1 per cent. 

Though this is low compared to the current market-leading easy-access savings rate of 0.65 per cent, it is better than Premium Bonds which pay no interest. 

We spoke to Keith Barber, director of business development at the Family Building Society, to get some answers to our reader’s questions.

How many Bonds are eligible for the draw?

Barber replies: The numbers of Windfall Bonds eligible to be entered in the monthly draw varies each month as customers open and close bonds.

To keep the chances of winning constant, there are a fixed number of prizes available and a fixed number of tickets for each monthly prize draw.

Currently the number of tickets each month is 15,000. This number was increased from the original 10,000 last year due to the popularity of the bond.

How does the draw work?

Barber replies: Each eligible bond is randomly allocated a unique ticket number, between 1 and 15,000 each month.

As the number of eligible bonds is a bit less than 15,000, not every available ticket number is allocated to a bond.

The chances of a £1 Premium bond winning a prize each month is 1 in 34,500

The chances of a £1 Premium bond winning a prize each month is 1 in 34,500

In a separate process an independent specialist firm draws the 21 winning ticket numbers from the full 15,000 tickets each month, allotting these to the 21 prizes available.

That last part is particularly important – the independent firm determines which tickets win which prizes.

We then cross-check the list of winning ticket numbers to the ticket numbers allocated to eligible bonds to find out which bonds have won which prizes.

This does mean that some prizes are not awarded each month as they are allocated to ticket numbers which are not linked to a bond.

How do you find out what prizes have been awarded?

Barber replies: Your reader makes a good point that we aren’t publishing the list of prizes won. 

We’ll address that and back-populate this years’ draw results with that information over the next couple of weeks. 

Can you explain why the £50,000 prize is not awarded every month?

Barber replies: In six months out of the last 10 so far this year the £50,000 prize has been won by a customer [rather than a blank ticket].

On the average month in 2021 to date, 11,800 of the 15,000 bonds were held by customers, equating to 79 per cent of the bonds.

We would therefore expect a customer to win the £50,000 prize in just under 8 months out of the possible 10 months.

Allowing for the statistical uncertainty of the draw, and based on a standard confidence interval of 95 per cent, it may be possible for there to be only seven or six months of wins over 10 months – but not five or fewer.

In 2021, we have seen six wins by investors and I am therefore confident to report that there is no evidence that the win likelihood of the unallocated bonds differs from that of the allocated bonds.  

Do Windfall Bonds offer a better return than Premium Bonds?

Barber replies: A straight comparison is difficult. The Windfall Bond offers a fixed number of prizes, the Premium Bond does not.

The Premium Bond prize fund of 1 per cent is the amount devoted to prizes. Bondholders only get a return if they win, and the chances of winning are higher with a Windfall Bond than with the equivalent holding of Premium Bonds.

The average long-term cost of the Windfall Bond is the annual prize fund (the total prize fund of £92,500 x 12 months divided by £150 million held in bonds).

This equates to a return of 0.74 per cent, plus interest of 0.10 per cent on top, although the actual cost does vary each month, sometimes higher, sometimes lower, depending on the prizes won by eligible bonds.