I’m interested to know how the Family Building Society operates its Windfall Bond, as I’m considering making the £10,000 savings deposit required. 

I have read the “rules” several times, but I don’t fully understand them. 

It appears that not all prizes are likely be awarded every month. This depends on how ‘tickets” are awarded. 

The winners’ names are published but the prize value is not. I am wondering, it is possible that the top monthly £50,000 prize has rarely been awarded, and possibly never awarded? (via email)

The Windfall Bond has a maximum capacity of 15,000 open accounts, each holding £10,000 - but the rules around how often the top prize of £50,000 is awarded confused our reader

The Windfall Bond has a maximum capacity of 15,000 open accounts, each holding £10,000 – but the rules around how often the top prize of £50,000 is awarded confused our reader

Ed Magnus, This is Money, replies: Most people won’t have heard of the Windfall Bond, or indeed its provider, the Family Building Society.

When it comes to savings products offering customers monthly prize draws, Windfall Bonds are very much the baby brother of NS&I’s Premium Bonds.

Britain’s most loved savings product, which began in 1956, is held by roughly 22 million people, and more than 113 billion £1 bonds were eligible for last month’s NS&I draw.

By comparison, Family Building Society’s Windfall Bonds, which began in 2015, have only £127 million stashed away in them and only a few thousand customers.

Windfall Bonds are similar to Premium Bonds and offer monthly prizes to bondholders that are all tax-free.

However, whereas Premium Bonds only require a minimum investment of £25 to enter the draw, Windfall Bonds require a £10,000 deposit.

There is no maximum cap on Windfall Bonds, subject to availability, whereas with Premium Bonds you can only deposit a maximum of £50,000.

Family Building Society winners
Prize Jan 21 Feb 21  Mar 21  Apr 21  May 21  Jun 21  Jul 21  Aug 21  Sep 21  Oct 21 
£50,000 1
£10,000  2
£1,000  12  11  14  10  11  10  10  11  11 
Number per month  17  13 18  15  16  16  15  13  15  15 
Value per month  £87,000  £23,500  £39,000  £85,000  £78,500  £87,500  £77,500  £84,500  £36,000  £28,500 

There are currently 12,700 Windfall Bond accounts, each holding £10,000 – but many bond holders have more than one account.

There are currently 15,000 windfall Bonds being entered in the monthly prize draw, and 2,300 blank tickets. 

This could be a problem if more people join the draw. Family Building Society however says that it does not affect the chance of winning.

Each qualifying £10,000 bond is entered into a free draw for a chance to win one of 21 monthly prizes. There are fifteen worth £1,000, three worth £2,500, two worth £10,000 and one £50,000 prize.

Each qualifying entry can only win one prize per month. According to the building society, each Windfall Bond entered into the draw has an 1 in 714 chance at winning a prize in any given draw.

This is based upon the fact that 21 prizes are selected and 15,000 tickets are entered into each draw. 

The Family Building Society offers a Windfall Bond that gives you a chance to win a prize at least once a year. This is approximately 1 in 60.

Premium Bonds offer much bigger money, with two £1 million prizes and five £100,000 prizes – but the odds of winning appear to be less promising. 

According to numbers crunched by data scientist Andrew Zelin on behalf of the Family Building Society, savers who put £10,000 in Premium Bonds would have to wait 11,926 years on average for a 50:50 chance of winning the £10,000 prize.

Windfall Bonds versus premium Bonds
Deposit Prize FBS Windfall bond: Years to wait for 50/50 chance of winning   NS&I Premium bonds: Years to wait for 50:50 chance of win
£10,000 £1,000 58  347 
£10,000  £10,000  433  11,926 
£10,000  £50,000  866  58 544 
Source: Andrew Zelin (data scientist). 

However, from a £10,000 Windfall Bond holding, a saver would have to wait on average 433 years to win the £10,000 prize.

Each Windfall Bond will be guaranteed interest at the Bank of England’s current rate of 0.1% in addition to the prizes. 

Although it is lower than the current market-leading, easy-access savings rate at 0.65 percent, it is still better than Premium Bonds that pay no interest. 

Keith Barber, director for business development at Family Building Society, was available to answer questions from our readers.

What number of Bonds are eligible to be drawn?

Barber replies:The number of Windfall Bonds available to be entered in the monthly draw varies with each month’s closing and opening of bonds.

To ensure that the chance of winning is constant, there is a fixed amount and a fixed quantity of tickets available for each monthly prize draw.

Currently, there are 15,000. Due to the popularity of the bond, the number of tickets per month has increased to 15,000.

How does the draw work?

Barber replies:Each eligible bond is randomly assigned a unique ticket number. This number can be between 1 and 15,000 per month.

The number of eligible bonds is slightly less than 15,000 so not all available ticket numbers are allocated to bonds.

The chances of a £1 Premium bond winning a prize each month is 1 in 34,500.

The chances of a £1 Premium bond winning a prize each month is 1 in 34,500.

An independent specialist firm draws 21 winning ticket numbers from the full 15,000 monthly tickets and allots these to the 21 prizes.

That last part is particularly important – the independent firm determines which tickets win which prizes.

We then cross-check our list of winning ticket number with the ticket numbers allocated for eligible bonds to determine which bonds have won which prizes.

This does not mean that prizes are not given out every month. Instead, they are assigned to ticket numbers not linked to bonds.

How can you find out which prizes were awarded?

Barber replies: Your reader makes a good point that we aren’t publishing the list of prizes won. We’ll address that and back-populate this years’ draw results with that information over the next couple of weeks. 

Can you explain why the £50,000 prize is not awarded every month?

Barber replies: In six months out of the last 10 so far this year the £50,000 prize has been won by a customer [rather than a blank ticket].

On average, 11.800 of the 15,000 bonds were held in 2021 by customers. This equates to 79.9% of the bonds.

We would therefore expect a customer to win the £50,000 prize in just under 8 months out of the possible 10 months.

Allowing for the statistical uncertainty of the draw, and based on a standard confidence interval of 95 per cent, it may be possible for there to be only seven or six months of wins over 10 months – but not five or fewer.

We have had six wins by investors in 2021. I am confident that there is no evidence to suggest that the win probability of unallocated bonds is lower than that of allocated bonds.  

Are Windfall Bonds more profitable than Premium Bonds?

Barber replies:It is difficult to draw a straight comparison. The Premium Bond has a fixed number, while the Windfall Bond has a fixed number.

Premium Bond prize money of 1 percent is used to pay prizes. Bondholders do not get a return if the bondholder wins. The odds of winning are higher for those who have Windfall Bonds than with Premium Bonds.

The average long-term cost of the Windfall Bond is the annual prize fund (the total prize fund of £92,500 x 12 months divided by £150 million held in bonds).

This is equivalent to a return 0.74 percent, plus interest at 0.10 percent. However, the actual cost of the bond can vary from month to month depending on the prizes that are won. 

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