The odds of winning a prize with National Savings & Investments' (NS&I) Premium Bonds have improved in recent months, and further increases may be on the horizon as the provider seeks to attract more savers. This development coincides with the 70th anniversary of Premium Bonds.
NS&I is currently aiming to attract £15 billion in new savings during the financial year ending March, with a £4 billion leeway on either side. In the first six months of this financial year, the institution attracted £4 billion from savers. To bolster its figures, NS&I has increased rates. The Premium Bond prize fund has risen from 3.3% in April to its current 4.35%, announced in August, which also improved the odds of winning from 23,000 to one to 21,000 to one.
Savers deposited an additional £594 million in September to participate in the monthly draw, an increase from £356 million in August. This marks a turnaround from earlier in the year when savers withdrew £29 million. The tax-free nature of Premium Bond prizes is expected to become even more attractive following the Chancellor's announcement in the recent Budget that the amount of tax payable on savings interest will rise from April next year, particularly benefiting higher and additional rate taxpayers.
The Bank of England is anticipated to announce a potential increase in its base rate from the current 3.75% to 4% tomorrow, a move aimed at curbing the rising cost of living. Should the base rate increase, banks and building societies are expected to offer improved rates on variable-rate accounts, prompting savers to review their current accounts to ensure they are receiving competitive deals.
Premium Bonds, which have been available for 70 years, offer savers a tax-free chance to win prizes monthly without losing their initial stake, with all funds guaranteed by the government. Currently, 22 million people hold £138 billion in Premium Bonds.