Premium Bonds odds shorten and 21m savers get a bigger prize pot

Millions of hard-pressed savers received a boost today with National Savings and Investments revealing it is passing the full base rate rise on - including shortening the odds on Premium Bond prizes.

NS&I says the current prize fund rate for Premium Bonds is 1.15 per cent - this will rise to 1.4 per cent on 1 December 2017.

Meanwhile, the odds of winning will be slashed from 30,000 to one, to 24,500 to one.

Savings cheer: NS&I has revealed it is passing on the interest rate rise from last week

The estimated prize pot for Premium Bonds in next month will be £83.1million, compared to £68.3million in November.

Furthermore, the total number of prizes will rise from 2.4million to 2.9million, the most it has ever offered.check link for further information about prize bonds can Premium Bonds are one of Britain's most popular financial products with 21million people saving more than £68billion into them.

Exactly a week after the Bank of England announced base rate was rising from 0.25 per cent to 0.5 per cent, the Government-backed savings provider has acted.

Rates will rise across its variable product range from next month. This is its Direct Isa, Direct Saver, Income Bonds, Investment Account and Junior Isa.

The Direct Isa will rise from 0.75 per cent to one per cent, Direct Saver from 0.7 per cent to 0.95 per cent, Income Bonds from 0.75 per cent to one per cent and its Investment Account from 0.45 per cent to 0.7 per cent.

HOW PREMIUM BONDS WORK

Premium Bonds are a savings account with a 'lottery-style' system.

You can put money in, but take it out whenever you want. 

You buy £1 bonds (there is a minimum investment of £100) and these are entered into the monthly prize draw. 

Each £1 bond has an equal chance of winning. 

The more you have in them, the higher the chances of winning - including two £1million jackpot prizes a month.
all depends on the prize bond result that who will win.

The maximum you can hold in them is £50,000 

With average luck, your annual return would be 1.4 per cent (from December 2017) 

Meanwhile, its Junior Isa will rise from two per cent to 2.25 per cent.

Ian Ackerley, chief executive at NS&I, said: 'NS&I is pleased to be able to offer savers increased rates across our variable products.

'By reflecting the change in the base rate we are continuing to meet the needs of savers, whilst also balancing the interests of taxpayers and the stability of the broader financial services sector.

'For our 25million customers, including around 21million Premium Bonds customers, these changes will present a welcome boost.

'NS&I will be giving out the largest number of Premium Bond prizes every month, an estimated 2.9million, and all money invested is 100 per cent secure, as NS&I is backed by HM Treasury.'

The move comes after criticism aimed at big banks in recent days.

Many have not announced whether they are boosting their rates, which were largely cut when base rate fell from 0.5 per cent to 0.25 per cent last summer.

HSBC, Santander, Lloyds, Barclays and RBS-NatWest all slashed the returns on their main easy-access deals before last week's rise in the Bank of England base rate.

None of the big five banks now pays more than 0.25 per cent. In the worst cases, HSBC Flexible Saver and NatWest Instant Saver pay 0.01 per cent.