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Millions of Premium Bond holders from July will see their prize fund rate increase for the first time in almost three years.
Government-backed NS&I has announced that the Premium Bond prize rate will increase by 50 basis points from 3.30% to 3.80% from the July 2026 draw onwards. The prize fund rate previously changed from 3.8% to 3.6% in August 2025 and then from 3.6% to 3.3% in April 2026.
The prize fund rate is designed to show what an average person might win in prize money each year, presented as an example interest rate. However, there are no guarantees you’ll receive this amount, and you could win more than this – or you could win nothing at all.
Andrew Westhead, NS&I Retail Director, said: “Premium Bonds offer the monthly excitement of tax-free prizes with 100% security backed by HM Treasury, and the flexibility to withdraw at any time. So, I’m pleased that from July we can improve both the prize fund rate and the odds, meaning even more chances to win for our 22 million Premium Bonds holders.”
How will the odds of winning a prize change?
The odds of winning a prize will shorten in July from 23,000 to 1 to 22,000 to 1. There will be an increase in the number of people who will win larger Premium Bond prize amounts. For example, the number of £100,000 prizes will rise from 71 to 83, and there will be 24 more £50,000 prizes, bringing the total number of £50,000 prizes to 167, up from 143.
Sarah Coles, head of personal finance at AJ Bell, 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 hikes.”
Ms Coles said that even when the prize fund rate falls, this fails to put many Premium Bond holders off. 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. A recent AJ Bell FOI found that fewer than 1% of Premium Bond prizes go to those holding less than £1,000.”
How does NS&I stack up against the competition?
It’s well worth comparing the Premium Bond prize fund rate and the rates offered by any other NS&I accounts you hold with the wider market.
Rachel Springall, spokesman for Moneyfacts, said: “While some savers could win big with their Premium Bonds and get a much higher return on their money than if they had put the same sum in a savings account, some unlucky savers may not win anything at all. The prize fund rate for Premium Bonds isn’t an interest rate and, in reality, many savers may find they receive a much lower return on their money than the advertised figure.”
You can read more about the pros and cons of all the various accounts NS&I offers in our article National Savings & Investments products explained and you can find some of the best fixed rate accounts below.
Top 5 Fixed Rate Accounts
Our articles Five ways to boost your savings returns and Are Premium Bonds better than savings accounts? explore some of the ways you might be able to make your savings work harder for you.
You may also want to read our guide Investing – the basics to find out more about whether investing some of your savings over the long term could be right for you. Bear in mind that this is only likely to be a suitable option for you if you’ve already built up a separate easily accessible pot of cash savings which you can use for any unexpected expenses, and are comfortable accepting the risks involved.
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