Millions of Premium Bond savers get set for major payouts as NS&I hikes rate to 14-year high with an extra £15m tax free prizes up for grabs
- NS&I’s Premium Bonds prize fund rate will also increase from 3 to 3.15 per cent
- Number of prizes ranging from £50 to £100k will rise from next month’s draw
Premium Bond savers are set for major payouts after National Savings & Investments (NS&I) raised its prize fund to 3.15 per cent starting from its draw next week.
This marks the fourth rise in the Premium Bond prize fund since interest rates started to climb just over a year ago.
The latest rise means an extra £15 million paid out in prizes compared to last month, bringing the total to £314.3 million.
The odds of each £1 Bond winning a prize will remain fixed at 24,000 to 1.
National Savings & Investments (NS&I) has raised its prize fund to 3.15 per cent starting from its draw next week
The changes mean that the number of prizes worth £50 to £100,000 will increase from next month’s draw on February 2.
Some 870,000 savers will also benefit from a boost to its Direct Saver, Direct Isa and Income Bonds.
Premium Bonds: How do they work?
Premium Bonds customers buy bonds at £1 each, but must now buy at least £25 in one go.
Every month, each bond is entered into a lottery.
Each bond can win several times over – or never.
Customers can cash their bonds in whenever they like, but might have to wait a couple of days to get the cash.
All prizes are tax-free.
Around 80,000 under-18s will gain from a rise in their Junior Isa rate.
The rate of NS&I’s second-most popular account, Direct Saver, goes up to 2.6 per cent from 2.3 per cent.
It’s the highest rate paid since the account was launched in March 2010.
This puts the easy-access account just behind the top payers on internet-based accounts and a top rate if you want to run the account by phone.
Income Bonds, popular with pensioners because interest is paid out monthly, have also risen to 2.6 per cent.
It is the highest rate since 2008. Just a year ago, it paid only 0.35 pc and a low of just 0.01 pc for the 12 months to November 2021.
Its Direct Isa is up to 2.15 pc from 1.75 pc, while its Junior Isa rises from 2.7 pc to 3.4 pc. It’s the latest move from the Government-backed bank to hit its financing targets.
State-owned savings bank NS&I plans to bring in £6 billion, plus or minus £3 billion, in its financial year to the end of March.
At the halfway stage to the end of September, it had reached a total of £3.4 billion.
Latest figures from the Bank of England show it saw £281 million leave in November, the first time it has seen an outflow since September 2021 and the largest since March that same year.
Ian Ackerley, NS&I chief executive, said: ‘The changes will provide a welcome boost for savers with more Premium Bond prizes and some of the highest interest rates in over a decade.’
The amount in Premium Bonds stands at nearly £200 billion as punters hope for a big win.
February’s draw has 4,989,652 prizes ranging from £25 to £1 million up for grabs.
This is an increase of 2,949 prizes compared with last month’s draw, which had 4,986,706 cash prizes.
This equates to £15,145,525 in extra cash available in next month’s draw.
There will be less £25 cash prizes, as part of NS&I’s strategy to cut smaller prizes while raising bigger ones.
This time round the number of £25 prizes drops by 241,741 to 2.37 million from 2.6 million in this month’s draw. The number has plummeted from 3.5 million in December’s draw.
The largest increase for next month comes in prizes of £50 and £100, both up 121,077 to 1.28 million apiece.
The number of £500 prizes will rise to 37,719 while it will pay 605 more £1,000 prizes, a total of 12,573.
The number of £5,000 prizes will rise by 61 to 1,177 while there will be 31 extra £10,000 pay outs, up to 590.
The total of £25,000 prizes increases by 12 to 236, while there will be 117 winners of £50,000, up from 111.
The £100,000 prize rises by three to 59 while the jackpot of £1 million stays the same at two each month.
The £1 million prize stays the same – with two people eligible to win the top cash amount.
Price increases from January to February’s Premium Bond draw
Value of prizes
January no. of prizes
February no. of prizes