'We won £300,000 in our bank's Superdraw': Do you feel lucky...? Then it's time to 'play' a raft of accounts where you can scoop big prizes - but without the risk

Mixing saving with gambling seems like a recipe for financial disaster. But some experts now believe the chance for savers to win a cash prize is a great way to encourage more people to take up the savings habit at a time when interest rates have hit rock bottom.

Spurred on by the popularity of Premium Bonds and the tax-free prizes that holders can win every month, a number of financial institutions led by Halifax are offering savers the opportunity to win cash prizes.

Some academics say the appetite for saving increases dramatically if there is even only a tiny chance of winning a return so big it could change your life. Prize-linked savings accounts, they argue, have the potential to revolutionise a savings market for the masses.

Loyal: Raymond and Catherine Sutton have banked with Halifax for more than three decades

Loyal: Raymond and Catherine Sutton have banked with Halifax for more than three decades

We won £300,000 in our bank’s ‘Superdraw’ 

Raymond and Catherine Sutton have banked with Halifax for more than three decades – and their loyalty has paid off after winning the top prize of £300,000 through the bank’s last ‘Superdraw’ in February.

Every month Halifax gives away cash prizes to savers, but a Superdraw offers bigger cash prizes to more people.

The Suttons, from Penwortham, Lancashire, only became eligible for the draw a little more than a year ago. Former police officer Raymond, 60, opened a cash Isa and Everyday Saver account with a lump sum paid out following his retirement. Now they have secured their financial futures, they can help their daughter Tracy Louise with her mortgage and donate to Sutty’s Shooting Stars – a charity they set up 15 years ago in honour of their son Carl, who died in a freak accident at the age of 23.

The charity helps to support young children through sport – something football-loving Carl was passionate about. ‘This win gives great financial security to me and my family,’ says Raymond. ‘After losing our son and with me facing another five years of work on top of building the charity, we’ve finally been lucky.’

Raymond and Catherine, 58, who recently celebrated their 40th wedding anniversary, say the windfall will also help the Carl Sutton Academy. It supports children aged between four and seven who want to play football.

Professor Peter Tufano, of the Saïd Business School at the University of Oxford, has researched this area extensively and found providers offering these accounts can draw in more people from differing backgrounds, ages and income levels.

A recent report he co-authored states that lottery-style savings offer lower earners a chance to escape a ‘poverty gap’ and ‘may attract individuals who eschew traditional savings products, even if the probability of winning those prizes is quite low’.

For those attracted to the idea of saving a little for the chance to win big, here is where you can find a prize-linked savings account:

PREMIUM BONDS 

From the beginning of June, the individual savings limit for Premium Bonds rises by a quarter to £50,000.

National Savings & Investments, which sells the bonds, is a safe home for savings and is backed by the Government. It pays out two million prizes of between £25 and £1 million each month, with two people winning the jackpot to become millionaires. No interest is paid but winnings are tax-free, which makes them ideal for higher rate taxpayers who have already utilised their Isa allowance and would pay higher tax on ordinary savings accounts. There is easy access to your savings, with no notice needed or penalty applied for withdrawing money.

The odds of winning are 26,000 to one for each £1 held and there is a minimum investment of £100. Odds improve the more bonds you hold.

Winning bond numbers are drawn by ERNIE – Electronic Random Number Indicator Equipment – technology invented by Bletchley Park code breakers in 1956.

SAVINGS ACCOUNTS

Customers of Halifax and Bank of Scotland with a total £5,000 held across any number of savings accounts can win between £100 and £100,000 tax-free with the group’s monthly ‘Savers Prize Draw’.

It is open to customers who register and live in England, Wales or Scotland, but not Northern Ireland, and excludes children’s savings accounts.

The £5,000 needs to be held in the accounts for the entire month before the draw. The next ‘Superdraw’ will be in June. At £2 million, it’s the biggest prize pot since the scheme launched in 2011.

Two customers will win £500,000 and three will get £100,000. There are also giveaways of £10,000 for ten lucky winners, £1,000 for 500 people and £100 for 1,000 savers.

But Halifax is reminding people they must register by the end of next month to be in with a chance of winning. This can be done online at Halifax.co.uk/saversprizedraw, by phone on 08445 715060 or by collecting a postal form from one of the bank’s branches.

Alternatively, the Family Building Society launched a ‘Windfall Bond’ at the end of last year, where anyone who deposits £10,000 is in with a chance of winning a top prize of £50,000 tax-free in a monthly prize draw. There is a low interest rate on the account of 0.5 per cent and the odds of winning a prize over the course of 12 months are 64 to one.

You need to give 35 days’ notice for withdrawals. Applications can be made online or through the post. Find out more at familybuildingsociety.co.uk or call 0843 7754640.

Andrew Hagger, of financial research company MoneyComms, says: ‘The Halifax deal is quite reasonable. Aside from the opportunity to win in the monthly draw, the bank pays above average rates on its range of savings accounts.’ Hagger says Windfall Bond customers are likely to sacrifice more because of the low 0.5 per cent interest rate on offer.

Gamble: The National Lottery versus the accounts

Gamble: The National Lottery versus the accounts

‘Compared with the 1.8 per cent best-buy rate, a basic rate taxpayer is forgoing £104 net interest income per year,’ he adds.

CREDIT UNIONS 

Special mutual societies run by their own members and serving local communities or groups of people – known as credit unions – put savings at the heart of what they do. Customers can access affordable loans and banking services but are encouraged to save regular sums, however small. 

As well as paying interest on savings balances, some credit unions offer lotteries for their members. For example, Glasgow Credit Union, Edinburgh-based Capital Credit Union, Rothersave Credit Union in South Yorkshire and No1 CopperPot – a union for serving and retired police force workers and family – all offer lotteries.

The sums given away vary between £50 up to a £3,500 jackpot and in some cases a member can even win a car. Not all credit unions offer a lottery.

To find the nearest union to you visit findyourcreditunion.co.uk.

DO THEY BEAT THE LOTTERY 

THERE is a one in 14 million chance of you winning the National Lottery jackpot. Although many would point to the UK as a cynical nation, experts have noted eternal optimism among its lottery players.

Chartered psychologist Dr Mark Griffiths, Professor of Gambling Studies at Nottingham Trent University, says: ‘Players tend to concentrate on what could be won, not the odds of winning.’

Savings accounts with a lottery-style element are based on the same principle – but can at least encourage the prudent habit of putting money aside. The main risk is not receiving interest.

‘Non-National Lottery prize draws get people to engage in a variety of behaviours including saving,’ adds Griffiths. ‘This isn’t gambling because nothing can be lost and it is risk-free.’

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