What are the chances of winning a £1 million Premium Bonds prize with an asset of £500 or less?

More than 22 million savers hold National Savings and Investments (NS&I) Premium Bonds in the hope of winning a big prize in the monthly draw.

Monthly prizes range from £25 to £1 million, with winning numbers chosen by ERNIE, NS&I’s electronic random number generator.

There are two jackpot prizes of £1 million, and in the October draw there were 88 prizes of £100,000 and 177 prizes of £50,000. These are the two biggest prizes in the draw, after the £1 million top prize.

Currently, the odds of a £1 bond winning a prize are 21,000 to 1, with Premium Bonds’ prize fund – or average prize payout per year – standing at 4.4 per cent.

But the odds of winning a Premium Bonds prize will increase to 22,000 to 1 in December’s draw as NS&I announced it would reduce the premium rate for Premium Bonds to 4.15 per cent.

Every month, in addition to the coveted £1 million jackpot prize winners, we’ll be keeping an eye out for the luckiest Premium Bonds holders who manage to bag big prizes (the £50,000 and £100,000 prizes in addition to the £ 1 million) with small assets.

The more you have in your possession, the greater the chance that you will win big. But, contrary to popular belief, you don’t need to have a maximum holding of £50,000 to bag a big prize.

Even someone with only a small nest egg who has just opened their account has a chance – even if very small – to win big.

Nothing epitomizes this better than the 2004 £1 million jackpot winner from Newham, London, who won with just £17 worth of Premium Bonds bought in February 1959.

More recently, in October’s draw, three Premium Bonds holders scooped prizes of £50,000 and £100,000 with small holdings of £500 or less.

A Premium Bonds holder based in Gloucestershire scooped a £100,000 prize with a small holding of just £275, while two other winners, from North East Scotland and Lincolnshire, scooped £50,000 prizes with £300 and £500 in their possession.

It led us, and the readers of This is Money, to ask: what are the chances of us winning a big Premium Bonds prize with a small holding of £500 or less?

We decided to enlist the help of a statistics wizard to help us understand the odds of this, and how the amount someone holds in Premium Bonds changes these odds.

We asked Dr. Michael Dunne-Willows, a statistician and ambassador for the Royal Statistical Society, to analyze the figures.

The odds of winning a £1 million jackpot prize with a £50 holding are 1 in 1.2 billion.

As the chances of winning a prize increase the more Premium Bonds you own, those holding £100 have a 620 million to 1 chance of winning the £1 million jackpot.

These odds reduce to 250 million to 1 if you have £250 in Premium Bonds. If you have £500 in your possession, you have a 1 in 120 million chance of winning a £1 million prize.

The odds of winning at least £100,000 in the Premium Bonds prize draw with a £50 holding are 1 in 27 million.

If you have an asset ten times that size, at £500, the odds are 1 in 2.7 million. Those holding £100 in Premium Bonds have a 1 in 13 million chance of winning at least £100,000 and if you hold £250 your odds are 5.5 million to 1.

When it comes to £50,000 prizes, Premium Bonds savers who own £50 have a 1 in 9.5 million chance of winning at least £50,000.

If you hold £100 in Premium Bonds, the odds of winning at least £50,000 are 4.7 million to 1, reducing to 1.8 million to 1 if you hold £250.

Holding £500 in Premium Bonds means you have a 1 in 940,000 chance of winning at least £50,000.

To bring these opportunities to life, This is Money has also analyzed NS&I data from the past 54 Premium Bonds draws, dating back to May 2020, when the pandemic Premium Bonds boom occurred, to see how many people are in managed to win one of the major prizes. with a small holding company.

Of the 6,070 winners of the biggest Premium Bonds prizes at the time, 46 holders won £50,000 or £100,000 prizes with holdings of £500 or less – that’s 0.8 per cent.

Twenty of the £100,000 prizes were won by NS&I customers with assets of £500 or less and 26 of the £50,000 prizes were won by those with assets of less than £500.

The most unlikely of these winners was a winner from Norwich who scooped a £50,000 prize from just £5 in the December 2023 draw. They bought their winning bond in April 2004.

As of May 2020, no £1 million jackpot winner has won their prize with holdings of £500 or less, but twelve people with £1,000 or less have won the £1 million jackpot prize since 1994, when the first prize of £1 million was launched.

James Blower, founder of the website Savings Guru, said: ‘There are approximately 1.2 million Premium Bond holders with a maximum holding of £50,000. Therefore, around £60 billion of the almost £126 billion saved in Premium Bonds comes from those with the maximum holdings – just under 50 per cent.

‘Given that there are 177 £50,000 prizes each month, it is not surprising that some have been won by those with smaller assets. Likewise, there are 883 prizes of £10,000 each month, so the odds are favorable that smaller holders have a chance of winning at least some of those.

‘There were 47,682 prizes of £10,000 in that period, so it’s no shock that 20 were won through lower value properties.

‘However, there are only two £1m prizes per month, so it is not at all surprising that the odds are not at all in favor of smaller holders.’

Anna Bowes, co-founder of the website Savings Champion, said: ‘The fact that some people won with a small amount will keep many invested.

‘The risk of £500 not earning interest is perhaps £25 a year – at current best buying rates. There will be people willing to risk that for the chance to win big – or win anything at all.”