Martin Lewis video: Should you keep Premium Bonds now the prize fund has dropped to 1%?

What would someone with average luck win?

Calculating this is complex, but our Premium Bond Probability Calculator works out your odds of winning using ridiculously complex multinomial probability (the algorithm was designed by a post-doctoral cosmology statistician), and it's just been updated with the latest prize distribution.

Martin explained that the tool currently shows:

• With £100 of bonds, with average luck you'd win NOWT over a year.
• With £1,000 of bonds, with average luck you'd win NOWT over a year.
• With £10,000 of bonds, with average luck you'd win £75 over a year (ie, equivalent to 0.75% interest).
• With £50,000 of bonds, with average luck you'd win £450 over a year (ie, equivalent to 0.9% interest).

Who are Premium Bonds best for?

• They're better if you're saving roughly £10,000+. As Martin said on his show last night: "The more you're saving, the better – over roughly £10,000, they start to look much better."
  
  
• They're better if you're saving for longer, but may need access. Martin said: "With fixed-rate savings your money is locked away, it isn't locked away in Premium Bonds."
  
  
• They really come into their own for the few who pay tax on savings interest. Premium Bond prizes are tax-free – then again, so is savings interest for 95% of people. But as Martin said yesterday: "If you're one of the very few people who use up their personal savings allowance, in that case because Premium Bonds are tax-free, that's a big boost for you."
  
  
• They're better if you don't really care about interest. If the prime aim is to protect your capital and keep it safe, and the interest isn't a big deal, you may as well enjoy the ridiculously small chance of winning large. Martin said: "There are some of you saying: 'I haven't got much money, I'm going to get diddly squat in interest. I don't care about the interest, I just want somewhere safe to put my money and I do like the appeal of the chance of winning a million pounds – even though it's minuscule.' Well then, put your money in Premium Bonds if you want."

Separately, it's worth being aware that NS&I – which runs Premium Bonds – also announced this month that it's delaying plans to scrap paper Premium Bonds prize cheques.