Biggest increase in Premium Bond winning rate in 40 years

NS&I’s Ian Ackerley said: “This is the second rise in the Premium Bonds Prize Pool rate in less than six months. These changes have helped us ensure that premium bonds remain attractive, while ensuring that we continue to balance the interests of savers, taxpayers and the wider financial services sector.”

However, experts have warned that the level of the prize pool subject to the holder’s chance of winning the prize, so some savers could earn less than 2.2 percent. Rachel Springall, from financial analyst Moneyfacts, said: “Savers may not get anything at all and could instead have their money in a savings account earning interest.”

Sarah Coles, of stockbroker Hargreaves Lansdown, said: “You’ll also pay a higher price in times of high inflation because, unless you’re above average lucky, you’ll lose a lot more of the tenancy power of your savings when you leave. them into Premium Bonds.”

Just one easy-to-access savings account offers a higher return than Premium Bonds. Yorkshire Building Society’s Rainy Day account pays savers 2.5 per cent, but only on balances of up to £5,000. Savers are also limited to two withdrawals per year.