Martin Lewis, the personal finance expert, has delivered a damning verdict on Premium Bonds and debunked some of the most prevalent conspiracy theories surrounding the popular savings prize draw.
Speaking on his BBC podcast hosted by Adrian Chiles this week, he described the figures involved in the draw, organised by NS&I, as ‘mind blowing’.
He also addressed theories suggesting that newly purchased bonds are more likely to win the biggest prizes. The discussion was initiated by a listener named ‘Nigel’, who questioned whether anyone was actually winning the substantial prizes.
Adrian Chiles, the host, read out his question: “A few weeks ago I asked on a post here if anybody knew anyone who had won a high value prize on the Premium Bonds. Guess what no-one replied.
“Don’t you find that odd? I have my suspicions about this draw and I think someone should check if high value winners are genuine people. I see a certain bond winner is from Yorkshire – who can be sure if it’s true or not?”.
Chiles then asked: “Do we need an investigation?” To which Martin responded: “No, forgive me but I simply don’t think that’s going on. It depends what you count as a high value winner. Shall we just do some stats? You’re going to be blown away by these numbers.”
Martin Lewis, the Money Saving Expert, has debunked myths surrounding Premium Bonds during a conversation with Adrian. He clarified, “Do you know how many Premium Bond £1 million prizes are won each month? Two.”
This means there are 24 millionaires created annually through these bonds. Martin asked, “How many Premium Bonds do you think there are out there? You need to remember what happens in Premium Bonds – each £1 bond is put into the draw like a ticket.
“So you might have 50,000 of them but it’s about the number of £1 bonds.”
He revealed that there are a staggering £120 billion worth of Premium Bonds in circulation. Breaking down the odds, he said, “So there are 24 £1 million prizes. There are 120 billion bonds. So if we do it on a single month you’ve got a one in 60 billion chance of winning the big prize. So you asked on some social media I don’t know how many people were looking at his individual post. I don;t know what people count as a high value prize. Certainlt the £1 million is rare, the £100,000 is pretty pretty rare as well.”
Addressing the concerns over the likelihood of winning significant amounts, Martin noted, “I don’t know how many people were looking at his individual post. I don’t know what people count as a high value prize. Certainly the £1 million is rare, the £100,000 is pretty pretty rare as well.”
He then tackled the conspiracy theories head-on, saying, “So no I don’t think it’s a conspiracy theory thing, I think it’s a mass thing.”
He dispelled rumours about the National Savings and Investments (NS&I) draws, such as ‘new bonds win’ or regional favouritism, stating, “There are so many conspiracy theories about Premium Bonds – do new bonds win more than old? No. Every £1 bond has the same rate. The reason people think new bonds win more than old is because there are a lot more new bonds as now you can put £50,000 in. If you bought them 30 years ago you were putting less in.
“Do they win in certain areas of the country more than others? Yes because certain areas of the country have more bonds than others. It is a random thing, I don’t think we’re being particularly duped on it.”
However, Mr Lewis expressed scepticism about the value of Premium Bonds for the average saver, stating: “I don’t like the actual product. I think it’s only really good for those people who are paying tax their savings and have used up all their ISAs allowance are top rate taxpayers and can put the full £50,000 in. But I don’t think we’re being duped in that they’re not paying the prizes out, no.”
An NS&I spokesperson defended the scheme, saying: “Premium Bonds are one of the nation’s favourite savings products and we pay out millions of tax-free prizes to Bond holders each month, ranging from £25 up to the lifechanging £1m jackpots. The April Prize draw saw 5.9 million prizes worth over £412 million awarded.
“ERNIE draws winning numbers at random, with every £1 Bond having a separate and equal chance of winning a prize.”
