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1 Mar 2021

Premium bond winners in March 2021: how many prizes do you need to win to beat inflation?

Premium bond's annual prize rate is currently 1% per year

Two lucky premium bond holders have each won a £1m jackpot in NS&I's March 2021 prize draw.

The jackpot winners are from Bristol and Kent, while five other winners secured the next-best prize of £100,000.

Here, Which? reveals the winning bond numbers, and looks at how many prizes you'd need to win each year in order to beat the current rate of CPI inflation.

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March 2021 premium bond prize winners

This month, the two £1m prizes went to premium bond holders in Bristol and Kent.

The Bristol winner is a woman, whose jackpot-winning bond (306PG138556) was bought in July 2017 as part of a £50,000 holding.

The second winner from Kent is a woman with a total premium bonds holding of £40,002. Like the winner from Bristol, she also bought her winning bond (307PX582004) in July 2017.

How many winners were drawn in March?

There were 3,022,805 premium bond prizes given out in the March prize draw, worth a total of £86,905,650. Of these, 3,015,678 were worth £100 or less.

The table below shows the full breakdown of prizes:

Value of prizeNumber of prizes

Source: NS&I

Can you beat inflation with premium bonds?

While the Consumer Prices Index (CPI) rate of inflation has remained very low over the past year - under 1% - consistently falling savings rates are making it increasingly difficult for savers to find accounts to equal or beat it.

As a result, many are still turning to premium bonds in the hope of winning prizes.

NS&I has calculated a 'prize fund rate' of 1%, which describes how much all of the money invested in premium bonds grows over 12 months. This takes into account those who win the £1m jackpot, along with thousands of others who win nothing at all.

Money held in premium bonds does not earn any interest, so you have to count on winning prizes if you want to see any kind of return on your cash.

To see how much you'd realistically need to win to make sure your money keeps up with price rises, we've looked at four different investment amounts, and used the most recent measure of CPI inflation, which was 0.7% in January 2021.

If you have £100 saved

To grow your £100 savings pot by 0.7%, you'd need it to earn 70p over the course of a year.

In a way, this is great news, as the smallest premium bonds prize is £25, which - even if you only won one prize over the course of a year would mean your savings had grown by a frankly whopping 25%.

However, as we've previously found, according to premiumbondcalculator.com, with average luck you need to have at least £2,000 saved to stand a chance of winning £25 over a 12 month period.

If you have £1,000 saved

To keep up with January's rate of CPI inflation, your £1,000 would need to increase by £7. Again, just one £25 prize would more than do the job, but your chances of winning £25 in a year with average luck aren't good.

However, even if you had to wait two or three years to get a £25 prize, it would still beat the current of inflation.

If you have £10,000 saved

You'll need a few more wins to secure the £70 needed to beat inflation with a £10,000 holding - that's at least three £25 prizes.

The premium bonds calculator says someone with £10,000 and average luck would win £75 over the course of a year, which is encouraging. However, if the inflation rate rises even just a little, it's unlikely your average luck would be able to keep up with it.

If you have £50,000 saved

To grow your £50,000 savings by at least 0.7%, you'll need to win £350-worth of premium bond prizes - so that's at least 14 of the £25 prizes, or a few of the higher-value ones.

The premium bond calculator says someone with average luck and a £50,000 holding could expect to win around £450 over the course of one year, with a virtual certainty of winning £100 or more.

But, of course, you're not guaranteed to win anything - regardless of how much money you have invested.

As premium bond numbers are picked entirely at random by NS&I's computer called ERNIE, each £1 bond has the same chance as being picked as any other.

What effect does inflation have on your savings?

CPI inflation tracks the price changes of an imaginary shopping basket containing more than 700 popular goods or services. Each month, the inflation rate describes how prices have changed compared to the same month of the previous year.

If you have savings left in an account for a long period of time which aren't earning interest that's at least equal to the rate of inflation, your money will lose its value as it won't be able to buy as many of the goods and services as it once could.