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Millions of Premium Bond savers gear up for big payouts as NS&I raises rates to 14-year high

Premium Bond savers are poised for big payouts after National Savings & Investments (NS&I) increased its prize fund to 3.15 per cent from next week’s drawing.

This is the fourth increase in the Premium Bond prize fund since interest rates started rising just over a year ago.

The latest increase means an additional £15 million in prize money compared to last month, bringing the total to £314.3 million.

The odds of each £1 bond winning a prize remain fixed at 24,000 to 1.

National Savings & Investments (NS&I) has increased its prize fund to 3.15 percent from next week’s drawing

The changes mean that the number of prizes worth £50 will increase to £100,000 from next month’s draw on 2nd February.

Some 870,000 savers will also benefit from a boost to Direct Saver, Direct Isa and Income Bonds.

Premium Bonds: How Do They Work?

Premium Bonds customers buy bonds for £1 each, but are now required to purchase a minimum of £25 at a time.

Each month, each bond participates in a lottery.

Each bond can win multiple times – or never.

Customers can redeem their bonds whenever they want, but they may have to wait a few days to get the money.

All prices are tax free.

About 80,000 young people under the age of 18 benefit from an increase in their Junior Isa rate.

The rate of NS&I’s second most popular account, Direct Saver, rises from 2.3 percent to 2.6 percent.

It is the highest rate paid since the account launched in March 2010.

This puts the easily accessible account just behind the top payers on internet-based accounts and a top rate if you want to manage the account by phone.

Income Bonds, popular with retirees because they pay monthly interest, also rose to 2.6 percent.

It is the highest rate since 2008. Just a year ago, it paid just 0.35 pc. and a low of only 0.01 pc. for the 12 months to November 2021.

The Direct Isa rises from 1.75 pc. to 2.15 pc, while the Junior Isa rose from 2.7 pc. to 3.4 pc. It is the latest move by the government-backed bank to meet its funding targets.

State savings bank NS&I plans to raise £6bn plus or minus £3bn in its financial year ending at the end of March.

By mid-late September, it had reached a total of £3.4 billion.

The latest figures from the Bank of England show it saw £281m out in November, the first time it has seen an outflow since September 2021 and the biggest since March of the same year.

NS&I CEO Ian Ackerley said: ‘The changes will give savers a welcome boost with more Premium Bond prices and some of the highest interest rates in more than a decade.’

The amount of Premium Bonds stands at almost £200 billion as gamblers hope for a big win.

The February draw has 4,989,652 prizes ranging from £25 to £1 million up for grabs.

This is an increase of 2,949 prizes compared to last month’s draw, which had 4,986,706 cash prizes.

This corresponds to £15,145,525 in extra cash available in next month’s draw.

There will be fewer £25 cash prizes as part of NS&I’s strategy to lower smaller prizes and raise larger ones.

This time around, the £25 prize count drops by 241,741 to 2.37 million, from 2.6 million in this month’s draw. The number is down from 3.5 million in the December draw.

The biggest increase for next month will come in £50 and £100 prices, both up from £121,077 to £1.28m each.

The number of £500 prizes will rise to 37,719, with a further 605 £1,000 prizes to be paid for a total of 12,573.

The number of £5,000 prizes will increase by 61 to 1,177, while there will be an additional 31 £10,000 payouts, to 590.

The total of £25,000 in prizes increases by 12 to 236, while there will be 117 winners of £50,000, up from 111.

The £100,000 prize increases by three to 59 while the £1 million jackpot remains the same at two per month.

The £1 million prize remains the same – with two people eligible to win the highest amount of money.

Price increases of the Premium Bond draw from January to February

Value of prizes

£1 million

£100,000

£50,000

£25,000

£10,000

£5,000

£1,000

£500

£100

£50

£25

Total

£299,202,350

January no. of prices

2

56

111

224

559

1.116

11,968

35,904

1,159,432

1,159,432

2,617,902

Total

4,986,706

February no. of prices

2

59

117

236

590

1,177

12,573

37,719

1,280,509

1,280,509

2,376,161

Total

4,989,652

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