When will NS&I increase premium bond prize fund rate?

Rollinghome

Seems pretty much business as usual for Premium Bonds.  Generally, a useful option for taxpayers who have exceeded their savings-tax allowance, and that of their spouse. A very useful option for those also liable for higher-rate tax.  Not very useful for non-taxpayers unless they're feeling very lucky.

Malthusian

RG2015 said:

There are lots of decent ISA rates currently available.

Premium Bonds require less rate-chasing than cash ISAs. NS&I moves the rate up and down but is extremely unlikely to drop the Premium Bond prize rate to 0.1% once they've taken in enough money.
There is also a good chance that a higher rate taxpayer is already maximising their ISA allowance to hold long term investments.

Daliah

They have today upped the interest rate on the Green Bonds from 1.3% to 3%. That's still not a market leading rate but an indication that they want people to deposit money with them. May be more attractive PBs are round the corner?

S_uk

As we get closer to the next MPC meeting, I'm feeling like I'd be less surprised if there was a 0.75% hike in interest rates rather than 0.50%. If it did, that would increase it to 2.50% with another two likely further hikes before Christmas. Think I'll probably be evaluating how much I keep in premium bonds, it's just a case of how long to wait to see if NS&I respond?

That said, for all I know I could get a visit/call from Agent Million imminently and this is all a moot point.. 

Albermarle

That said, for all I know I could get a visit/call from Agent Million imminently and this is all a moot point.. 

I would not wait by the phone though, as someone with the full £50K  will on average win a Million about every 40,000 years.

S_uk

Albermarle said:

That said, for all I know I could get a visit/call from Agent Million imminently and this is all a moot point.. 

I would not wait by the phone though, as someone with the full £50K  will on average win a Million about every 40,000 years.

True.. but nevertheless it would still make my point moot!

S_uk

With today's 0.50% rise in interest rates to 2.25% and two likely further rises before the end of the year, I think unless NS&I increase the PB prize rate pretty soon I will probably move some funds over to my cash ISA and possibly fix for a year.

refluxer

It's now got to the stage where basic rate tax payers who've exceeded their PSA are likely to be better off in the best easy access account (at around 2%) and paying the tax than they would with an expected 1.3% return on a large holding of PBs.

I guess the lure of a 'big win' may still tip those people in favour of PBs though !

Time4T_Accounts

Yup.  If they don’t increase very soon, then the arithmetic is definitely saying ‘tis time to move.

TUVOK

I've held the maximum for nearly 2 years, 0.70% return last year and up to last month 0.90%.
So no big prize and very low returns, unless N.S.& I improve the price % this month I will start reducing and investing in Fixed rate/notice accounts.
I like many others dream of a big win, but time is running out fast before withdrawing.