Bond prize list
It'sprobably a coincidence that in the week that the National Bureau of Statisticsannounced a record £ 16.1bn of public sector debt in August, National Savings& Investments (NS & I), said improving conditions of bond premium.
Wesaid that NS in July and I just wanted to say to match the inputs and outputsfor this financial year, ie would not be making a contribution to fill the holeEUR 175bn debt projected for 2009/10. One aspect of this neutral stanceappeared to be the reduction in bond prize rate of 1.8% to 1%, which came intoforce on 1 April 2009. This left over 96% of the monthly award winners for only€ 25.
NS& I have decided to invest part of that court and 1 October 2009, theunderlying rate of awards will increase to 1.5%. NS & I will not give anyspecific reason why the rate has increased, although it is noteworthy that whenthe rate dropped earlier this year, noted that the fall in the Bank of EnglandBase Rate. Behind the scenes seem as if the sales of premium bonds overstagnation: the September prize fund was £ 7,650 less than July.
Theextra prize money has been used to increase the chances of winning more thanthe amount earned, as shown in the table below.
NS& I noted that, with luck, then someone else with maximum exploitation of £30,000 in Premium Bonds can enjoy the 15 prizes a year compared with 10 today.What I do not say is that awards the bondholders are likely to be all 25 pounds(ie £ 375 in total, or 1.25% of their original investment).
COMMENT
Premiumbonds with 1.5% award rate are now looking for a little more interesting. Thebest instant access rate is around 3.3% gross, which now nets up 1.98% to ahigher taxpayer. However, with the 50% tax coming in April, a 1.5% net theorywith 100% certainty seems attractive – if the rate lasts.
dura.
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|
Current Terms |
Terms From 1 October 2009 |
|
Prize fund rate (pa) |
1.0% |
1.5% |
|
Odds of monthly win |
1 in 36,000 |
1 in 24,000 |
|
Minimum Prize |
£25 |
£25 |
|
Monthly Prize Distribution by Total Prize Fund Value:£25£50 £100 £500 – £1,000 £5,000 – £1,000,00 |
80.3% 2.9% 5.8% 5.0% 6.0% |
80.3% 2.9% 5.8% 5.0% 6.0% |
|
Monthly Prize Distribution by Number of Prizes:£25£50 £100 £500 – £1,000 £5,000 – £1,000,00 |
96.229% 1.762% 1.762% 0.240% 0.007% |
96.229% 1.762% 1.762% 0.240% 0.007% |
|
Number of £1m prizes |
1 |
1 |