Millions of Premium Bond holders will have a better chance of winning from July, after National Savings & Investments (NS&I) confirmed it is raising the prize fund rate. The rate will increase from 3.30% to 3.80% for the July 2026 draw, reversing the cut made in April when it fell to just 3.60%. The odds of any single £1 Premium Bond winning a prize will also improve, moving from 1 in 23,000 to 1 in 22,000.
The Government-backed bank estimates that the changes will add around 322,000 extra prizes to July’s draw, with the overall prize pot rising by more than £60 million. The monthly prize fund is expected to grow from about £376.2 million in May to roughly £436.8 million in July. Within this number, the July prize draw will see 12 more £100,000 prizes on offer, as well as 24 more £50,000 prizes and 49 extra £25,000 prizes.
Andrew Westhead, retail director at NS&I said: “Premium Bonds offer the monthly excitement of tax-free prizes with 100% security backed by HM Treasury, and the flexibility to withdraw at any time. So, I’m pleased that from July we can improve both the prize fund rate and the odds meaning even more chances to win for our 22 million Premium Bonds holders.”
Premium Bonds are one of the UK’s best-known savings products. Instead of paying interest, each £1 bond is entered into a monthly draw, with tax-free prizes ranging from £25 to £1 million. Savers can buy them online, by phone or by post, and must be aged 16 or over to purchase them.
However, the prize fund rate is not the same as a guaranteed savings return. Some holders may win more than they would earn in a standard account, while others may receive nothing.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, warned that “winning is all about luck” and said Premium Bonds do not provide a regular income.
For savers who want a predictable return, a traditional savings account may still be worth comparing, particularly while some providers continue to offer rates above 4%. NS&I has also raised rates on some of its own savings products, including Direct Saver, Income Bonds, Direct ISA and Junior ISA.
Springall said: “Premium Bonds do not pay a regular income, so a savings account could be a better choice to provide a regular income from a nest egg.”
Nicola Morgan, consumer finance expert at Confused.com comments: “Changes to Premium Bond odds will be welcome news for millions of savers, especially at a time when many households are looking for safer ways to grow their money while still keeping access to their savings. An increase of 322,000 extra prizes in July means bondholders have a slightly better chance of winning, and for some people, the excitement of potentially landing a large tax-free prize remains a big draw.”