My parents and mother in law all have the maximum (£50,000) each and win every month; usually a few hundred
That's unlikely to be strictly true that they win 'a few hundred' each on £50k every month. Understanding how PBs work is a lot easier if you have a basic understanding of statistics and things like bell curves/normal distributions.
The current pay out rate is 2.2% and each bond has a 1 in 24000 chance of winning, so on £50k you should win 2 prizes per month on average and these prizes are most likely to be £25, 50 or 100 each. But in reality, you are likely to win around 25 prizes a year, and some months you'll win nothing, some 1, some 2, some 3 etc. Most months you'll win between 1 and 3 prizes and most of these will be £25 with the odd £50 or 100, based on statistics.
Have a play with the calculator on the MSE website for different amounts and look at the tabs at the bottom for further analysis/explanation.
www.moneysavingexpert.com/savings/premium-bonds-calculator/#result
But it is quite likely that on £1000 you'll never or rarely win. The green tab at the bottom of the MSE calculator shows that if you hold £1k for 1 year, you have a 60% chance of winning nothing. On lower amounts, you're gambling the interest you would receive on an instant access savings account.
If you put £1000 in the best available account today, it will pay out 2.75%, or £27.50 interest in a year. So by having the same amount in PBs, you're giving it up for a slightly worse than 50/50 chance of getting a similar amount (probably £25) but a smaller chance that you'll win more, possibly very much more.
If you look at the details of prize winners on the NS&I website, you'll see that some quite small holdings do win big money. But statistically, it's low odds.
Eg this month there were 11 people with holdings of £1000 or less, who won at least £5000.
www.nsandi.com/prize-checker/winners
Including two that have had £25/35 for decades and won £5000.