NS&I premium bond returns questioned

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NS&I premium bond returns questioned

Wed 1st Apr 2009

Savers have just a one per cent chance of beating inflation with their premium bonds, it has been revealed.

Coming as growing numbers of Britons turn to the state-run savings vehicle in a bid to keep their money safe, a study carried out by the website MoneySavingExpert.com found that new changes to the savings system now mean that the odds of people winning one of the cash prizes on offer has shrunk substantially.

The website's Martin Lewis explained: "The new £25 prize was heralded as a way to make more winners, yet the interest rate crash has swallowed that up, and savers now have less chance of winning at least £25 than they used to of winning £50.

"While having a little flutter on the bonds isn't the worse thing in the world, for someone with average luck, using it as the core of your savings simply won't deliver decent returns."

However, NS&I spokesman Gareth Headon has defended premium bonds, arguing that they are a "hugely popular way to save", with one million tax-free prizes set to be given out in April.

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