Premium Bonds prizes UK: what is the NS&I prize rate, is it going up, how to buy - is it worth using savings?

The Premium Bonds prize rate is set to increase to its highest level for 14 years in February

<p>The Premium Bond prize rate in the UK is set to rise to its highest rate in 14 years next month. (Credit: Adobe)</p>

The Premium Bond prize rate in the UK is set to rise to its highest rate in 14 years next month. (Credit: Adobe)

The Premium Bonds prize rate is set to increase next month, with millions of bond holders across the UK hoping to boost their investment. It will mark the highest level of prize rate for the savings scheme in 14 years.

The National Savings & Investment (NS&I) group handle premium bonds in the UK. Many people use this method of saving to give them an extra chance of boosting their pot with the chance of winning tax-free cash prizes as they save.

But what is the prize rate increasing to, and what does this mean for bond holders? Here’s everything you need to know about the latest prize rate increase.

What is the NS&I prize rate?

Currently the NS&I prize rate sits at 56 prizes of £100,000. However, the prize rate has increased four times in the past year.

Those holding premium bonds will see the rate increase to 59 prizes available from February 2023. There will also be 12,573 prizes of £1,000 available from February, up from 11,968 in January.

However, NS&I have warned that the prize rate increase will not shorten your odds of recieving a prize. The operator has said that this is because there will be fewer £25 prizes available, with odds remaining unchanged at 24,000/1.

Why is the prize rate going up?

The increase in the prize rate is reflected in an improvement in saving rates. This often happens when there is fierce competition between providers.

However, there have been warning that the improved savings rate may have reached its peak. It comes amid rising inflation in the UK, with economists predicting that the Bank of England may attempt to slow down the interest rate to help ease the rising inflation rate.

How do you buy premium bonds in the UK?

Premium bonds in the UK are sold by the NS&I. They are available to buy on the operator’s website.

Throughou the website, you can enter your card details to allow the bond to be bough, Alternatively, it is also possible to buy bonds over the phone, by post or through a bank transfer.

Each investment bond must be worth at least £25 for it to be eligible for premium bond prizes. More information is available on the NS&I website.