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

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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.

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' NS&I to increase Premium Bond prize rate to 4%'

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  • Swipe
    Swipe Posts: 5,085 Forumite
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    There's now a greater chance of wining a £50 or £100 prize than a £25 on a max holding
  • eskbanker
    eskbanker Posts: 31,034 Forumite
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    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
    Swipe Posts: 5,085 Forumite
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    edited 30 June 2023 at 7:43PM
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    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
    riggie Posts: 8 Forumite
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    Just checked because of this post ........... kerching  £50
  • datostar
    datostar Posts: 1,288 Forumite
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    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
    fidaa Posts: 56 Forumite
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    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
    badger09 Posts: 11,206 Forumite
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    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
    friolento Posts: 1,157 Forumite
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    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
    talexuser Posts: 3,499 Forumite
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    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
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    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.
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