Premium Bonds savers will have a better chance of winning a cash prize in next week’s lottery, but analysts are urging bond holders to “shop around” to guarantee a return.
National Savings and Investments (NS&I) has raised its Premium Bond prize fund rate from 3.80 per cent to 4.35 per cent ahead of the September draw, which takes place on Tuesday, September 1.
The increase marks the second uplift this year, following a previous rise from 3.3 per cent in July. Odds on each £1 bond have shortened from 22,000-to-1 to 21,000-to-1, meaning savers now stand a better chance of winning tax-free cash.
The boost will deliver more than 308,000 additional prizes compared with August’s draw. Results will be available on the NS&I prize checker on Wednesday, September 2, following the standard practice of updating the day after each monthly draw.
NS&I is improving the odds of someone winning a Premium Bonds prize as of next week’s draw
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GETTY/NS&IThose who win prizes of £5,000 or above can check NS&I’s published list on the first working day of the month. The total prize pot has swelled by approximately £63million, bringing it to more than £497million for September.
NS&I anticipates distributing in excess of 6.5 million prizes in the upcoming draw. The 4.35 per cent prize fund rate represents the highest level since March 2024, reflecting NS&I’s efforts to make its flagship savings product more competitive.
The Government-backed savings institution has a £15billion net financing target for the 2026/27 financial year, which means it must ensure its offerings remain sufficiently attractive to draw in fresh deposits and retain existing holders.
Caitlyn Eastell, a personal finance analyst at Moneyfactscompare, said: “The latest move from NS&I may leave savers feeling more encouraged.
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“Not only has it boosted the Premium Bond prize fund from 3.80 per cent to 4.35 per cent tax-free, but the odds have also improved to 21,000 to one.”
Ms Eastell added that Premium Bonds offer “a fun and unconventional way to win tax-free cash” alongside full HM Treasury-backed security, making them especially appealing for those who have exhausted their ISA allowance or risk breaching their personal savings allowance.
However, she cautioned that the 4.35 per cent figure should not be confused with a guaranteed headline rate.
The savings expert added: “Despite the improved odds, they are a game of chance. With the cost of living continuing to weigh on household budgets, it’s understandable savers may not want to leave their returns to chance.”
Is Premium Bonds making your savings go further? | GETTY / NS&I
For those seeking more predictable returns, the leading easy access ISAs currently offer rates above 4.50 per cent, with even higher returns available for savers prepared to tie up their money for a fixed term.
NS&I has also lifted rates on its British Savings Bonds for the second time in under a month, with returns now reaching as high as 4.85 per cent. Ms Eastell described this as “great news” for savers who want certainty on their returns.
“While the latest hike has made their bonds more attractive, savers should still shop around,” she said, noting that the best-paying fixed bonds elsewhere now offer five per cent.
The competitive pressure is ultimately beneficial for consumers, Ms Eastell argued, as it provides “greater choice of inflation-busting rates” and demonstrates that even a Government-backed institution must fight for deposits.