Premium bond prize rate raised to 3%

[DealorNoDeal]

Previously 2.2%.

[northernladuk]

That's only half the story though. There is a big change to how the prize pool is allocated which is more interesting.

https://www.nsandi.com/get-to-know-u...ize-allocation

A nice breakdown of the Dec 2022 pot and an estimated 2023 pot. Note there is a typo in the title saying estimated Jan 2022 but it should be 2023

They've increased the total pot and also the percentage of the pot for the higher prices but with a significant reduction in the number of £25 prizes.
Nice to have a higher chance to win a bit more but I will miss getting the £25's. Keeps it interesting getting something rather than nothing but the increase in the higher prizes should be better.

I have always hated the 1 mil prizes though. I don't think this should be a way to get rich. I'd rather more people got a good chunk to enrich their life than a few mega prizes. Personally I'd rather forty more 50k's a month than two 1 mils. Possibly even an extra eighty people getting 20k but I can see how a top prize that is less than you can actually invest doesn't look that attractive.

[AtW]

It’s the magic mil that keeps people’s money in

[DealorNoDeal]

At the moment it's acting like a base rate tracker (with instant access).

Despite an easing of inflation, BoE still expected to raise by 0.5% tomorrow to 3.5%, with the terminal rate still forecast at over 4% next spring.

[d000hg]

I have always hated the 1 mil prizes though. I don't think this should be a way to get rich.

It's a bit of a weird idea all round - government backed gambling with your savings. I kind of like it, it just seems odd.

[Dark Black]

That's only half the story though. There is a big change to how the prize pool is allocated which is more interesting.

I have always hated the 1 mil prizes though. I don't think this should be a way to get rich. I'd rather more people got a good chunk to enrich their life than a few mega prizes. Personally I'd rather forty more 50k's a month than two 1 mils. Possibly even an extra eighty people getting 20k but I can see how a top prize that is less than you can actually invest doesn't look that attractive.

I've always thought along the line of this for the various lotteries - but for them, maybe capping prizes at a couple of mill (couldn't really have a EuroMillions if less than that). That way they spread (smaller) wealth amongst more people. Agree though that it wouldn't look so attractive.

[northernladuk]

It’s the magic mil that keeps people’s money in

It would be scratch cards and lotteries maybe but is that true for Premium bonds. Nearly everyone I've ever spoken to talk about a safe if not modest return on spare money with the hope of winning more. Not one person mentioned being in it for the millions. It's usually just spare money squirreld away than gambling for the big one if you get me.

I've always thought along the line of this for the various lotteries - but for them, maybe capping prizes at a couple of mill (couldn't really have a EuroMillions if less than that). That way they spread (smaller) wealth amongst more people. Agree though that it wouldn't look so attractive.

As metioned above I think it's for a different set of people. Scratch cards/Lottery has to be a massive prize because they only enter for the dream of the big win. People will buy a lottery ticket hoping to win big but people don't seem to put money in to Premium Bonds with teh same mentality. To get poor people to part with pounds they can't really afford it's got to be attractive. Funny thing is, it appears in more cases than not, that much money seems to just bring more misery than happiness.

[AtW]

Premium Binds is gambling tailor made to smart money saving people - no risk to capital, gambling only interest on it which unlike normal interest is tax free, olus winning a cool mil - thus kept money in even when they paid out tulip

I’d prefer unlimited deposits and more smaller “prizes”

[DealorNoDeal]

Nearly everyone I've ever spoken to talk about a safe if not modest return on spare money with the hope of winning more.

My reasons:
1) when rates were near-zero, it was a bit more interesting than a savings account which paid SFA
2) pays a better rate than most instant access or short-notice savings accounts
3) don't need to keep moving the money from one institution to another, which is an absolute PITA these days, chasing a decent rate
4) there's always that chance...

[northernladuk]

My reasons:
1) when rates were near-zero, it was a bit more interesting than a savings account which paid SFA
2) pays a better rate than most instant access or short-notice savings accounts
3) don't need to keep moving the money from one institution to another, which is an absolute PITA these days, chasing a decent rate
4) there's always that chance...

Yep same as me and the others I spoke to so on option 4) I'd rather more chances of a meaty chunk than one of a massive one.