NS&I has confirmed an important update for all 24 million Premium Bonds holders, effective from July 1, 2026. The prize fund rate for Premium Bonds will increase to 3.80%, signaling more attractive prize opportunities for bondholders in the upcoming draw.
This change comes after the prize fund rate was reduced in April 2026, when the odds of winning also lengthened. Now, the odds will improve to 22,000 to 1, up from 23,000 to 1, enhancing the chances of winning tax-free prizes.
The higher prize fund will add approximately 322,000 more prizes in July compared to the previous months, with the overall prize pot increasing by over £60 million. This means more winners and larger total payouts, offering renewed appeal for savers.
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Rachel Springall, a finance expert at Moneyfactscompare.co.uk, commented, “Savers who prefer keeping their money with NS&I will welcome this rise in rates. However, it’s important to note that some easy-access accounts now offer over 4%, and certain fixed-term accounts yield upwards of 4.50%."
She added, “Despite these higher rates elsewhere, many savers prioritize the safety and trust of NS&I, which is fully backed by HM Treasury. Given the current economic outlook with interest rates remaining high for longer, NS&I is striking a balance by offering a fair rate without leading the market.”
In the June 2026 draw, nearly 6 million tax-free Premium Bond prizes totaling over £376 million were awarded to bondholders. There were more than 136 billion £1 bonds eligible for the draw. Since the first draw in 1957, over 839 million prizes worth £41.5 billion have been won.
Andrew Westhead, NS&I Retail Director, highlighted the excitement saying, “Summer started brightly with two lucky £1 million jackpot winners from Leeds and Cheshire & West Chester. With the prize fund rate and odds set to improve in July, more prizes will be available to celebrate.”
Prize checker access will begin on June 2, allowing savers to see if ERNIE, the random prize draw machine, has selected them for a win.
Rachel Springall concluded, “An increased prize fund rate is encouraging for those who enjoy the excitement and potential big rewards of Premium Bonds. However, it’s essential for savers to remember that Premium Bonds do not pay interest and returns rely entirely on luck. With inflation, the real value of money held in Premium Bonds can decrease over time.”
She recommends considering traditional savings accounts for those seeking regular income from their savings, while Premium Bonds remain a popular option for those aiming for tax-free prize winnings or as memorable gifts.