NS&I’s Premium Bonds prize funds rate is to become more generous, with savers having the chance to win an additional 1.4 million tax-free cash prizes each month.
The Premium Bonds prize fund rate will increase from 1.00% to 1.40% from June 2022 and the odds of each £1 Premium Bond number winning a prize will improve from 34,500 to one to 24,500 to one.
The increased prize fund rate will see an estimated additional 1.4 million prizes paid out in next month’s draw, including an estimated 10 prizes of £100,000, 19 prizes of £50,000 98 prizes of £10,000. However, the estimated number of £1,000,000 prizes will remain unchanged at two.
NS&I is backed by the Treasury and has a responsibility to balance the interests of savers, taxpayers and the broader financial services sector.
Recent increases to the Bank of England base rate mean that some savings rates have been rising.
Economic Secretary to the Treasury John Glen said: “Premium Bonds have offered the public an alternative way to save since they were first introduced in 1956, and next week marks 65 years since Ernie (Electronic Random Number Indicator Equipment) drew the first Premium Bonds prize winners.
“I’m delighted to see NS&I raise the prize fund rate on Premium Bonds, which will see an additional 1.4 million prizes worth £40 million being returned to savers each month – helping to put money in the pockets of the nation’s savers.”
NS&I chief executive Ian Ackerley said: “The new prize fund rate ensures that Premium Bonds are priced appropriately when compared to the interest rates offered by our competitors.
“It also ensures that we continue to balance the interests of savers, taxpayers and the broader financial services sector.
“Premium Bonds customers will benefit from the chance to win a further 1.4 million tax-free prizes each month, as well as the peace of mind that customers get with 100% of their NS&I savings being backed by HM Treasury.”
Commenting on the announcement, Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: “It was only right that rates rose to reflect market movements elsewhere.
“It’s welcome news for more than 21 million loyal savers who hold the bonds.
“They’re attracted by the chance of a life-changing win, the fact that prizes are tax-free and the fact that money in Premium Bonds is backed 100% by the Treasury. However, a competitive prize rate is the least they deserve.”
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