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Millions of Premium Bond holders from September will see their prize fund rate increase for the second time this year.
Government-backed NS&I has announced that the Premium Bond prize rate will increase by 55 basis points from 3.80% to 4.35% from the September 2026 draw onwards. The prize fund rate previously changed from 3.6% to 3.8% in July.
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: “This is the second time this year we have been able to increase Premium Bonds prize fund rate and shorten the odds. The September Premium Bonds draw is now expected to have more than 6.5 million tax-free prizes worth over £497 million. Premium Bonds continue to offer over 22 million savers of all ages the monthly excitement of tax-free prizes with 100% security backed by HM Treasury, and the flexibility to withdraw at any time.”
How will the odds of winning a prize change?
The odds of winning a prize will shorten in September from 22,000 to 1 to 21,000 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 83 to 95, and there will be 27 more £50,000 prizes, bringing the total number of these to 192, up from 167.
Sarah Coles, head of personal finance at AJ Bell, said: “Premium Bond holders will be delighted with the second hike in two months to the prize rate. It’s a decent jump, and is accompanied by a shortening of the odds. For those who have stuck with the bonds through thick and thin, they’ll be grateful things are getting thicker.”
However, Ms Coles reminded bondholders to be realistic. She said: “Of course, it doesn’t change the fact that in an average month the average bond holder will win nothing. Those with smaller amounts are even less likely to see anything resembling a return. An FOI submitted by AJ Bell earlier this year revealed that fewer than 1% of all Premium Bond prizes between February 2025 and January 2026 went to accounts worth £1,000 or less – with almost two thirds of all holders never winning a prize.
“Your Premium Bonds will also lose money after inflation, so if you need to hang onto your spending power, you may prefer the certainty of a savings account. If you shop around, there are some great rates available at the moment – particularly from online banks and savings platforms.“
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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