Premium Bonds update over future prize rate increases | Personal Finance | Finance

May 15, 2026 3,574

A couple check their finances

The Premium Bonds prize draw takes place at the start of each month (Image: Getty)

Premium Bonds savers may want to check over their accounts. NS&I is making key changes to the rules for the savings scheme.

In a boost for customers, NS&I has announced it will increase the Premium Bonds prize fund rate along with the odds of winning. The provider is also upping the rates on several of its other accounts.

The Government-run bank has said that from the July draw, the prize fund rate for Premium Bonds will rise from the current 3.3 per cent up to 3.8 per cent. The odds of winning for each £1 Bond will also be increasing from July, going up from 23,000 to one to 22,000 to one.

This is a quick reverse in fortunes for customers, as NS&I cut the prize rate from 3.6 per cent down to 3.3 per cent from the April draw. The odds of winning were also cut from the April draw, down from 22,000 to one to 23,000 to one from the April draw.

There were three cuts to the prize fund rate in 2025. Sarah Coles, head of personal finance at wealth firm AJ Bell, said it’s high time NS&I upped its rates.

She said: “It was starting to get a bit embarrassing for NS&I to have fallen quite so far behind the more competitive accounts in the easy access market. Cuts in April meant Premium Bonds were paying a prize rate of just 3.3 per cent, where easy access savers can get their hands on more than 10 accounts without restrictions on withdrawals paying over 4 per cent.

“The rise in the prize rate, and the increases to its other easy access products is NS&I playing catch up with the wider market. It did the same with its fixed rate accounts at the end of April and has finally bitten the bullet with its easy access products.”

Could the prize fund rate go up again?

Ms Coles was asked if NS&I could increase the rate again. She said: “What happens next for Premium Bonds will depend on the wider world. War in Iran and the resulting rise in the oil price means we could see more inflation.

“This could keep interest rates higher for longer, which in turn would keep easy access rates higher. At the moment, the market is pricing in two more rate rises during the rest of 2026 – and possibly even a third. Each rise is likely to push the easy access market higher – including Premium Bonds. It means this might not be the end of the prize rate rises.”

Rachel Springall, finance expert at comparison site Moneyfactscompare.co.uk, said it’s good news for Bond holders that they will have a better chance of a win. She explained: “These products are a great option for savers who want the chance to win big, or to even open them as a gift.

“It’s worth pointing out that the prize fund rate is now back to where it was last year, as it was 3.80 per cent in April 2025. It rises and falls to adjust to the net financing targets and, of course, considers wider interest rate moves.”

Are Premium Bonds the right choice for you?

Premium Bonds continue to be popular, with the prospect of a big win in the monthly prize draw. You can take home a huge sum, with prizes on offer each month for £100,000, £50,000 or even a £1million jackpot.

But your chances of a win are small, and most prizes are for small amounts such as £25 or £50. Ms Coles said the savings scheme may not suit everyone.

She said: “There will always be people drawn to Premium Bonds because of the vanishingly small chance of winning a life-changing sum of money, and for them the prize rate rising is a nice-to-have on a product they’re already committed to. However, if you have this money set aside for the long term, you need to bear in mind that in an average month, someone with average luck will still win nothing, so there’s a real risk of your money losing spending power after inflation.”

Other NS&I rates increases

NS&I has also announced it is increasing the rates across four of its savings accounts. The new rates took effect from May 14.