NS&I boosts Premium Bond rates: Millions of savers will FINALLY see the odds of winning a monthly prize grow – after four Bank of England rate hikes
- NS&I will increase the Premium Bonds prize fund rate from 1 to 1.4% from June
- Odds of each £1 Bond number winning will go from 34,500 to 1 to 24,500 to 1
- Will see an additional 1.4m prizes paid out in the June Premium Bonds draw
National Savings and Investments will increase the Premium Bond underlying prize fund rate from 1 per cent to 1.4 per cent boosting the chances of its 21million savers bagging a monthly prize.
As of June 2022, the odds of each £1 Premium Bond number winning a prize will change from 34,500 to 1 to 24,500 to 1.
The increased prize fund rate will see an estimated additional 1.4million prizes paid out in the June Premium Bonds prize draw – and is the first move for the hugely popular state-backed savings scheme after four Bank of England rate rises
The number of £100,000 prizes will rise from six to 10, and £50,000 prizes from 11 to 19.
Luck of the draw: Each month NS&I hands out two £1m prizes and five £100,000 prizes, 11 £50,000 prizes and 20 prizes worth £25,000.
NS&I cut the amount it pays in monthly prizes from 1.4 per cent to 1 per cent in December 2020 and prizes have been frozen there since, despite the base rate having risen tenfold in that time.
The Government-backed savings provider has come under increasing pressure to raise the prize rate for Premium Bonds after four Bank of England rises since December hiked base rate from 0.1 per cent to 1 per cent.
Meanwhile, savings rates have dramatically improved, with the best easy-access savings accounts now paying as much as 1.31 per cent.
John Glen, economic secretary to the Treasury, 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 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 £40million being returned to savers each month – helping to put money in the pockets of the nation’s savers.’
With roughly 21million – one in three of the UK population – holding them, this will boost the chances of all bond holders winning one of tax free prizes ranging from £25 to £1million every month.
The total number of prizes next month will rise from 3.42million to an estimated 4.84million.
|Value of prizes||Number of prizes in May||Number of prizes in June (estimate)|
The total value of all prizes on offer will rise from £98million to £138million.
There will continue to be two £1 million jackpot winners each month.
Along with the boost to £100,000 and £50,000 prizes, the number of £25,000 prizes will increase from 24 to 40.
The popular NS&I product allows savers to stick up to £50,000 in the accounts.
Over the past two years a considerable amount has been stashed into Premium Bonds.
There are currently almost 118billion bond numbers eligible for the draw, up from just over 86billion eligible bonds in March 2020.
It is worth noting that although the chances of winning a prize worth £100,000 or more will increase, most winners will continue to scoop up one of the £25 prizes awarded each month.
Next month, roughly 4.75million of the total 4.84million prizes awarded will be for £25.
In terms of winning one of the two £1million jackpots – bond holders chances will remain incredibly remote.
According to data scientist, Andrew Zelin, those who invest £1,000 into Premium Bonds currently have to wait 3.2million years for a 50:50 chance of pocketing the top £1million prize.
Premium Bonds celebrate 65 years since the first draw next week – it was made in June 1957.
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