Thanks, Ernie! Premium Bond cash prizes up an extra £40m
Tens of millions of savers will now have a better chance of winning a Premium Bond prize.
national savings & Investments (ns&I) has pledged to increase its prize draw fund by £40 million.
The move means an extra 1.42million prizes will be handed
out next month by ernie (electronic Random number Indicator
equipment) – the machine that generates the winning numbers.
And the odds of each £1 bond number winning will improve from 34,500 to one to 24,500 to one.
ns&I’s Premium Bonds are by far its most popular savings product, with more than 21 million holders putting up to £50,000 into them.
But prizes have been frozen at 1 per cent of the amount saved in the bonds since December 2020, even though the Bank of england’s base rate has risen tenfold in that time. This will now rise to 1.4 per cent.
In total, customers hold £117.8 billion worth of bonds, hoping to win a monthly tax-free prize of between £25 and a lifechanging £1million.
In the past 12 months alone, savers have piled in more than £8.6billion.
Most of the extra prizes will be for £25. The estimated number of these up for grabs in next Wednesday’s June draw will rise by 1.4million to 4.75million.
The number of £50 and £100 prizes will increase by 6,015 each to 37,922 apiece.
There will be 8,292 prizes at £500, 2,764 at £1,000, 196 at £5,000, 98 at £10,000 and 40 prizes of £25,000. Of the top prizes, there will be ten of £100,000, up from six last month. The number of £50,000 prizes will rise by eight to 19.
The number of £1million prizes each month remains at two. next week, ns&I will celebrate 65 years since ernie drew the first prize winner. Ian Ackerley, chief executive of ns&I, said: ‘The new prize fund rate ensures that Bonds are priced appropriately when compared to interest rates offered by our competitors.’
Laura suter, head of personal finance at investment platform AJ Bell, said: ‘ns&I is finally reacting to rising interest rates, which has led to a boost in average savings rates. It needed to become more competitive to draw more people in.’
Last June, ns&I backed down on its drive to axe prize cheques being sent through the post after a Money Mail campaign.
It planned to force winners to have the cash paid directly into their bank accounts.
‘It needed to be more competitive’