- Premium Bonds holders now have a better chance of winning a prize
National Savings and Investments (NS&I) will raise the Premium Bonds prize fund rate from 3.3 per cent to 3.8 per cent from the July 2026 draw.
The Treasury-backed bank is also improving the chances for each £1 bond winning a prize from 23,000 to 1 to 22,000 to 1.
The prize fund rate was previously slashed from 3.6 per cent to 3.3 per cent from the April 2026 draw and the odds were shortened to 23,000 to 1.
This means the new rate and odds represent a sharp U-turn from NS&I which This is Money’s savings expert Sylvia Morris predicted just this week.
Savers voted with their feet when the prize rate reduced, with £100million taken out of the bonds in April.
NS&I says that compared to May 2026 there will be approximately 322,000 extra prizes in the July draw, with the prize pot increasing by over £60million.
It’s expected there will be 12 additional £100,000 prizes, 24 more £50,000 prizes and an extra 49 £25,000 prizes.
Good news: NS&I has increased the prize fund rate on its popular Premium Bonds
| Value of prizes | Number and total value of prizes in May 2026 | Number and total value of prizes in July 2026 (estimate) |
|---|---|---|
| £1,000,000 | 2 | 2 |
| £100,000 | 71 | 83 |
| £50,000 | 143 | 167 |
| £25,000 | 285 | 334 |
| £10,000 | 712 | 835 |
| £5,000 | 1,425 | 1,667 |
| £1,000 | 15,046 | 17,472 |
| £500 | 45,138 | 52,416 |
| £100 | 1,538,283 | 1,945,344 |
| £50 | 1,538,283 | 1,945,344 |
| £25 | 2,808,135 | 2,306,675 |
| Total: | 5,947,523 (£376,180,825) | 6,270,339 (£436,833,475) |
| Source: NS&I | ||
Andrew Westhead, NS&I retail director, said: ‘Premium Bonds offer the monthly excitement of tax-free prizes with 100 per cent 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.’
Rates rise on other accounts
In a further boon for savers, NS&I is improving the interest rates it offers across four of its savings products by up to 0.4 per cent.
From today the interest rate on NS&I’s Direct Saver account increases from 3.05 per cent variable to 3.45 per cent variable.
The tax-free Direct Isa now offers 3.8 per cent interest variable, hiked from 3.5 per cent.
| Account | Previous interest rate | Interest rate from 14 May |
|---|---|---|
| Direct Saver | 3.05% gross/AER | 3.45% gross/AER |
| Income Bonds | 3.01% gross/3.05% AER | 3.40% gross/3.45% AER |
| Direct Isa | 3.50% AER | 3.80% AER |
| Junior Isa | 3.55% AER | 3.70% AER |
| Source: NS&I | ||
These accounts are now more competitive, however they still sit towards the bottom of our best savings rates tables.
The rate of inflation ticked up from 3 per cent to 3.3 per cent in March 2026 as the impact of the Iran War started to hit the economy.
This makes it even more important to make sure your savings are at the very least exceeding the rate of inflation.
It’s possible to achieve rates of 4 per cent and above. It’s worth comparing all your options using our savings tables, which are regularly updated by our expert Sylvia Morris.
NS&I says Premium Bonds are the most popular UK savings account.
Instead of paying interest, there’s an annual prize fund rate that funds the monthly draw for tax-free prizes.
Each £1 Bond purchased is entered into a monthly prize draw, where prizes range from £25 to £1 million.
Individuals can hold up to £50,000 in Premium Bonds, including those aged under 16.
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