MSE News: NS&I to increase Premium Bond prize rate to 4%

MSE_Petar

NS&I will increase its Premium Bond prize-fund rate to 4% from 3.7% for its August 2023 draw and beyond, with an extra £30 million in prizes up for grabs. This latest increase – the seventh we've seen in just over a year – is to the highest rate since 2007. The odds of winning will also increase from 24,000 to one to 22,000 to one.

Read the full story:
' NS&I to increase Premium Bond prize rate to 4%'

If you haven’t already, join the forum to reply.

Swipe

There's now a greater chance of wining a £50 or £100 prize than a £25 on a max holding

eskbanker

Swipe said:

There's now a greater chance of wining a £50 or £100 prize than a £25 on a max holding

As there was before this change!

Swipe

eskbanker said:

Swipe said:

There's now a greater chance of wining a £50 or £100 prize than a £25 on a max holding

As there was before this change!

But July's draw is the first time it will happen which is what I meant.

riggie

Just checked because of this post ........... kerching  £50

datostar

I've got the maximum holding and have had £1125 in prizes so far this year.  I'm very close to the iniquitous 40% tax rate. If that was in an interest bearing account I'd be at risk of losing £450 of it. My wife isn't a taxpayer so I gift money to her for her savings account and ISA (which she has because if I go first she will definitely become one). Suits me fine.

fidaa

datostar said:

I've got the maximum holding and have had £1125 in prizes so far this year.  I'm very close to the iniquitous 40% tax rate. If that was in an interest bearing account I'd be at risk of losing £450 of it. My wife isn't a taxpayer so I gift money to her for her savings account and ISA (which she has because if I go first she will definitely become one). Suits me fine.

Why are you close to 40% considering premium bond wins are tax free

badger09

fidaa said:

datostar said:

I've got the maximum holding and have had £1125 in prizes so far this year.  I'm very close to the iniquitous 40% tax rate. If that was in an interest bearing account I'd be at risk of losing £450 of it. My wife isn't a taxpayer so I gift money to her for her savings account and ISA (which she has because if I go first she will definitely become one). Suits me fine.

Why are you close to 40% considering premium bond wins are tax free

I assume @datostar is close to 40% tax rate due to his earnings. He is explaining why keeping £50k in tax free PBs makes financial sense to him. If the same amount was in a savings account, some or all of the interest would be taxed @ 40% so overall return would be lower. 

friolento

badger09 said:

fidaa said:

datostar said:

I've got the maximum holding and have had £1125 in prizes so far this year.  I'm very close to the iniquitous 40% tax rate. If that was in an interest bearing account I'd be at risk of losing £450 of it. My wife isn't a taxpayer so I gift money to her for her savings account and ISA (which she has because if I go first she will definitely become one). Suits me fine.

Why are you close to 40% considering premium bond wins are tax free

I assume @datostar is close to 40% tax rate due to his earnings. He is explaining why keeping £50k in tax free PBs makes financial sense to him. If the same amount was in a savings account, some or all of the interest would be taxed @ 40% so overall return would be lower. 

The taxed return from a savings account might also be higher than the tax-free return from PBs. There is no guarantee that you win anything in PBs. Pot luck, basically.

Having said this, I also keep the max in PBs, for reasons outlined by @datostar

talexuser

datostar said:

I've got the maximum holding and have had £1125 in prizes so far this year. 

Looks about right, I've had £1000 and other half £1275 so far on max. I'm on 40% and the only other tax hack left is VCTs which are a bit too hairy for me

CompulsiveSaver

So NS&I are still paying catch-up... Shawbrook are now paying 4.35% and even the best ISAs are 4.1% (Coventry).

Does anyone else think they should just add £25 prizes? the £1 million is a nice marketing point, but there is almost no chance of winning it! so just keep a single million prize and vastly increase the £25 prizes, that way there is a much better chance of winning something! (yes, I did get less than £100 this month on the max holding )  which is what we are doing by putting our money in premium bonds.