National Savings and Investments (NS&I) has issued a clear warning to holders of its popular Premium Bonds, urging them to make an active choice about how they receive their winnings. This follows customer concerns raised on social media about apparently missing prizes from the monthly draws, where rewards range from £25 to a life-changing £1 million.
Customer Queries Prompt Payment Clarification
The government-backed savings provider moved to explain its payment process after a customer publicly queried a discrepancy on the platform X, formerly Twitter. The saver reported that the official NS&I prize checker application indicated they had four prizes to collect, but funds for only one had arrived in their account.
In response, NS&I stated that it distributes millions of prizes each month, with payments being rolled out in batches over several days. This process can lead to delays between winning notification and funds arriving, depending on the customer's chosen payout method.
The Critical Choice: Bank Transfer or Reinvestment
NS&I emphasised that bondholders have a crucial decision to make regarding their winnings. Customers must log into their online account and select their preference.
The two options are:
- Having prizes paid directly into a nominated bank or building society account.
- Automatically reinvesting winnings into more Premium Bonds, up to the maximum holding limit of £50,000.
The provider highlighted that choosing a direct bank transfer is quicker than waiting for a cheque by post. However, it also pointed out a significant advantage of reinvestment: any prizes ploughed back into more bonds are immediately eligible for the following month's draw, including the two top £1 million jackpots awarded every month.
How the Premium Bonds Prize Fund is Allocated
NS&I, which is backed by HM Treasury, also detailed the complex methodology behind its prize fund distribution. The balance of the fund allocated to higher-value prizes is divided equally among the remaining prize values after the million-pound payouts.
The calculation works from the highest value downwards. Officials first determine the number of £100,000 prizes. If a balance remains that is less than half the £100,000 value, it is carried over to the share for £50,000 prizes. Conversely, if the balance is at least half, an additional £100,000 prize is awarded, with the shortfall taken from the £50,000 prize share.
This process repeats for each prize tier. Notably, when calculating the number of £5,000 prizes, any surplus or shortfall is then added to or taken from the medium-value prize band, ensuring the entire monthly fund is distributed.
This clarification serves as a timely reminder for the millions of UK savers with Premium Bonds to review their account settings and ensure their prize preference is correctly recorded to avoid any confusion or delay in receiving their winnings.
