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NS&I increases prize fund rate for Premium Bonds

25th July 2014 Print

Following the announcement in the 2014 Budget that NS&I would help support savers by increasing the Premium Bonds investment limit to £40,000, and increase the number of £1 million prizes from one to two, NS&I has announced that the Premium Bonds annual prize fund rate will increase from 1.30% to 1.35% from 1 August 2014. The increase in the prize fund rate means that in addition to the extra £1 million prize, the number of prizes in each value category will increase or stay the same.
The annual prize fund rate of 1.35% is paid on the total number of eligible Bonds in the draw, which since the maximum investment was increased from £30,000 to £40,000 in June 2014, has increased by over £1.3 billion. Consequently, the prize fund is estimated to increase from £51,988,425 in July 2014 to £55,517,300 in August 2014, and the number of prizes is estimated to increase from 1,845,745 to 1,898,030.

From 1 June 2014, Premium Bonds holders were given the opportunity to increase the amount they invested from £30,000 to £40,000, consequently giving them more chances to win tax-free prizes from ERNIE. The last time the maximum investment limit for Premium Bonds went up was in May 2003 when it increased from £20,000 to £30,000.
Over 21 million people hold Premium Bonds and they continue to remain popular with savers for a variety of reasons: for example, they offer a chance to win tax-free prizes, and of course the potential for a visit from Agent Million if you are the lucky winner of one of the two £1 million prizes.
Jane Platt, Chief Executive, NS&I, said: “Premium Bonds are one of the nation’s favourite ways to save. Today’s news is good news all round as we’re able not just to add an additional jackpot prize of £1 million, but also to increase the overall number of prizes. Many of our savers have taken the opportunity to increase their savings in Premium Bonds and as a consequence increase their chances of winning.”