The prize fund rate is to drop from the December draw and then again in January
Some NS&I Premium Bonds holders may want to think about moving their money, as research suggests the majority will never win anything.
Ms Suter said: "Considering many Premium Bond holders will never win a prize and the average expected return is lower than the top easy-access account, savers could well be better off with a guaranteed return elsewhere." Despite the drawbacks, Ms Suter believes that Premium Bonds will remain a popular option among savers. "These accounts are still likely to continue to be very popular as they are backed by NS&I and many savers have huge brand loyalty to the organisation," she explained.
Even with £10,000 invested, the median annual winnings would only amount to about £375. For those with the maximum holding of £50,000, the expected return would be approximately £1,950, equating to an effective prize rate of 3.9 per cent. The NS&I website warns potential savers that the scheme might not be ideal for those who "want a regular income" or seek "guaranteed returns", highlighting the variable nature of prize winnings.
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