Overview
- NS&I will raise the Premium Bonds prize fund rate to 3.8% for the July draw, improving the odds of a win per £1 bond from 23,000-to-1 to 22,000-to-1.
- The July changes add about 322,000 extra prizes, with 12 more £100,000 awards and big increases in £50 and £100 payouts.
- A Fidelity review of the past decade estimates £5,000 in Premium Bonds would be about £6,190 today, which is below the £6,992 needed to match inflation and far behind trackers at roughly £15,900 for a global fund and about £11,600 for a FTSE 100 fund.
- Experts say Premium Bonds work best as a safe, quick-access pot because they pay no interest, prizes are tax-free but not guaranteed, and the prize fund rate can change with broader interest rates.
- Some banks now run prize-linked or high-rate accounts with guaranteed interest that may suit near-term goals, including options from Santander, Kent Reliance, Family Building Society, Chip, and Revolut.