Overview
- Premium Bonds pay no interest and instead put each £1 holding into a monthly, tax‑free prize draw that includes two £1 million jackpots, with current odds reported at 22,000 to one.
- The prize fund rate has been trimmed several times this year to 3.6%, and with the Bank of England holding base rates and cuts widely expected, experts see a near‑term rise in generosity as unlikely.
- Financial advisers say younger or growth‑focused savers should consider interest‑bearing accounts or ISAs, noting that compounding elsewhere can outperform prize‑based returns over time.
- Holders who have gone a year without any wins are being told to review allocations and potentially move some cash to higher‑yielding savings or make use of the £20,000 annual ISA allowance.
- NS&I highlights full HM Treasury backing and easy access as key benefits, while new reporting notes a record 1.4 million savers hold the £50,000 maximum and suggests some may be influenced by tax considerations, with any changes to ISA limits described as speculative.