Premium bonds: more chance of win as NS&I ups prize fund rate again
Summary
The UK’s National Savings and Investments (NS&I) has raised the prize fund rate for premium bonds from 3.8% to 4.35%, increasing the number of prizes and improving the chances of winning. This change will start in September and means more higher-value prizes but fewer small £25 prizes. However, many bond holders have never won, and premium bonds do not pay interest, which may affect returns when considering inflation.Key Facts
- NS&I raised the premium bond prize fund rate from 3.8% to 4.35% starting in September.
- The odds of winning with each £1 bond improve from 22,000-1 to 21,000-1.
- There will be about 308,000 more prizes and the total prize money will increase by £63 million to £497 million.
- The number of bigger prizes (£50,000 and £100,000) will increase, while smaller £25 prizes will reduce.
- Premium bond winnings are tax-free, but the bonds do not pay interest, which means they may lose value compared to inflation.
- A freedom of information request showed that 62% of premium bond holders have never won a prize.
- Premium bonds may appeal to savers who have used their ISA allowance or reached their personal savings allowance.
- Savings accounts currently offer up to 5% interest, which guarantees returns unlike the chance-based premium bonds.
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