Archive: MoneySavingExpert's Money Tips Email

Urgent. Energy firm punch-up - take advantage, save £200/yr.
Brit Gas, E.on, Scot Power & Shell in a fight to undercut each other

There's an energy firm price war on. They're battling to be the top big name in the switching tables. It started with British Gas, then E.on undercut, Scottish Power came in - and the lead's flick-flacked as each has cut prices 3 times in response, leaving them now £20ish/yr cheaper than the start. Millions can save, such as Jan, who tweeted: "@MartinSLewis thanks to you I've saved over £1,000/yr on my energy bills. Feel like I've been ripped off for years." So if you're one of the many who tell us you want a name you know, here's the state of play... 

• Find choosing confusing? We can pick your winner for you. For those unsure who to choose, our Pick Me A Tariff every year (MSE Autoswitch) tool is recommended. Tell it your preferences and it'll find your winner from the whole market (incl deals below), and then when that ends, it emails you your new winner, and you switch again with just one verification click. Alternatively, Pick Me A Tariff for now does the same, without switching you at the deal's end. 

• Sadly, these deals aren't available for prepay and Northern Ireland. Instead, do a prepay comparison or see our Cheap NI Energy guide.
  
  
• Switching is easy - little changes apart from service and cost. Switch firm and it's the same gas, same elec and same safety. The only things that change are the customer service and who bills you. Your supply isn't cut off as part of the process, while no one visits your home unless you want or need smart meters. See our switching FAQs for more help.

Martin: 'Premium Bond rate slashed to 1%, but in the current bonfire of savings, that's actually not bad... so who should have 'em?'

Yesterday was a BAD DAY for the 21m people with a staggering £99bn saved in NS&I Premium Bonds. The chance of winning fell, as the prize-fund rate dropped from 1.4% to 1%. In normal times, that'd be pitifully low, but times are far from normal. This paltry 1% compares well to savings elsewhere. Yet the prize rate isn't an interest rate, so working out if it's right for you takes explanation...

• Premium Bonds are a lottery. Each individual can own up to 50,000 £1 bonds, and the money put in is safe. Each bond is entered into a monthly prize draw. The prize fund dictates how much is paid out annually. So the 1% means for every £100 of bonds, £1 of prizes is paid out per year (in maths, the 'mean' average). But in practice that doesn't happen, as the smallest prize is £25, and for a few bonds to pay out £1m, many need to pay out nothing.
  
  
• The key is 'What would someone with average luck win?' Imagine everyone with the same number of bonds lined up in order of their winnings - the person in the middle is the definition of average luck (in maths, the 'median' average). Calculating this is complex, so years ago I had our Premium Bond Probability Calc built. It 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, so have a play. It 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, equiv 0.75%).
  - With £50,000 of bonds, with average luck you'd win £450 over a year (ie, equiv 0.9%).
  
  
• Top normal savings pay just 0.6% easy access, from 0.8% fixed. Top savings rates are disappearing all the time, so I won't list best buys here - instead here are links to updated info: Easy access 0.6% | Notice 0.8% | 1yr fix 0.8% | 2yr fix 1%. Much higher rates are possible via Help to Save (for those on low incomes), Lifetime ISAs (for 1st time buyers), regular savers (if putting money away each month) and current account savings (for smaller amounts).
  
  
• Who are Premium Bonds best for? The Premium Bond (PB) prize-fund rate may smash easy-access savings rates, but remember most people WON'T win as much as that, and fixed savings can be at a higher rate anyway. Full info in our Are Premium Bonds worth it? guide, but in a nutshell, here's when PBs are better compared to normal savings...
  
  - They're better if you're saving roughly £10,000+. The more bonds you have, the closer you get to the prize-fund rate.
  - They're better if you're saving for longer, but may need access. Top fixed savings beat PBs for most with average luck. Yet with fixes your money's locked away, while PBs allow access to your cash. So if you want to save for the longer term, but keep access to your money, they're a decent option.
  - They really come into their own for the few who pay tax on savings interest. PB prizes are tax-free - then again, so is savings interest for 95% of people. But if you earn more interest than the personal savings allowance, you'd have to be very unlucky for PBs not to be the winner (especially as cash ISA rates are poor).
  - 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.

PS: NS&I has just announced it's delaying scrapping paper Premium Bonds prize cheques.