Martin Lewis debunks 'complete urban myth' around winning NS&I Premium Bonds

Martin Lewis has sent an important message to anyone who has NS&I Premium Bonds.

The money saving expert has debunked what he described as a 'complete urban myth' around which premium bonds are the most likely to win. Premium bonds, which he described as an "incredibly popular" form of savings, were a topic of conversation of Mr Lewis's latest podcast, which is available on BBC Sounds.

Starting the segment with an explanation of what premium bonds are and how they work, Mr Lewis told listeners: "Premium bonds are a form of saving operated by NS&I that used to be known as National Savings, which is the government owned financial institution."

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He explained that having savings with NS&I is "as safe as it gets" because they are "totally backed up". He elaborated: "Every penny you've got in there is backed up by the government. The only way you could have a problem is if the government went bust - then we'd all have bigger problems."

Mr Lewis explained that the capital you put in is safe. "In other words, you're always at worst going to get your money back," he said.

However, the interest that you get on your savings is determined by a prize draw. Mr Lewis explained: "Each individual bond goes into a prize draw and has a chance of winning an amount of money, from £25 up to a million pounds. And that's what dictates the interest that you get. So your interest is a gamble, but your money is totally safe."

Mr Lewis said there are "many myths" about premium bonds but warned his listeners about one in particular, explaining why it was not correct.

He told his listeners: "I often get asked, I've had my premium bonds a long time but haven't won anything, will I be better off buying new bonds because they seem to win more? Complete urban myth."

Debunking the common misconception, he explained: "Every bond has the same chance of winning in the prize draw as every other bond. The reason more new bonds win is because there are more new bonds.

"When people were buying these bonds in the 1960s and 1970s, they were buying £1, £10, £20 worth. Now people are buying £500, £1,000, £10,000 worth. So there are just simply more new bonds, so more new bonds win more often."

Mr Lewis said there are also urban myths around people in different areas winning more often than others - which he said was also incorrect. "That tends to just be a fiction as people in those areas have more premium bonds," he said.

It comes as the odds of winning Premium Bonds is set to worsen from the December draw. NS&I said the Premium Bonds’ odds of winning will change from 21,000 to one to 22,000 to one.

There will still be an estimated two prizes of £1 million in the December draw, the same as in October, but in total there will be an estimated 5,726,438 prizes worth £435,686,300 in December, down from 5,991,306 prizes worth £461,330,525 this month.

The prize fund rate for Premium Bonds will change to 4.15% in December, down from 4.40%.