Martin Lewis issues warning to 22 million people who have Premium Bonds

Martin Lewis has issued a warning over National Savings and Investments (NS&I) accounts. The BBC Sounds podcast host and ITV regular has explained who should avoid Premium Bonds despite over 22million people in the UK investing in them.

The ITV and BBC star says Premium Bonds remain ever-popular - with the UK holding more than £100billion in them. But he said: "For those people only putting a small amount in and who don't pay tax on savings - which is a lot of people - premium bonds are a bad bet.

"I mean, there will always be someone who beats the odds and has more than typical luck but they're a bad bet." The 52-year-old Money Saving Expert added: "The more you put in, the closer you will get to the prize fund rate.

READ MORE UK set for new snow bomb which will 'explode' this weekend with 9 inches dumped

"Once you start moving up to between £2,000 and £3,000 and your return is around 3.5 per cent, if you would otherwise be paying tax on your savings… then they start to become a decent bet with typical luck. So you will want to fill up your cash ISA already, at that point they become a decent bet, especially if you can max them up and you're lucky enough to put £30,000 to £50,000 in, especially if you would be paying tax on your savings otherwise.

"With typical luck, they do become something worthwhile." He added: "I accept the idea of psychology that people like dreaming big and winning £1million. But I mean, you've probably got more of a chance of tossing a coin and it landing on its side.

"Premium bonds can work for people who have a lot of savings and are paying tax on them, they're not so good for smaller savers." If you put £1,000 into premium bonds, he explained, you have a 56.5 per cent probability of winning nothing, a 43 per cent change of winning at least £25, and a 35 per cent chance of winning at least £50.