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Should Preium Bond prizes be increased now interest rates are so high?

Options
NS&I reduced interest rates and Premium Bond prizes when interest rates were low. Now the rates are high, isn't it time to increase Premium Bond prize money?

Should Preium Bond prizes be increased now interest rates are so high? 27 votes

Yes, Premium Bond prize money should be increased
74%
SwipedonglemouseSonOfPearlReleaseTheStarsAliss08tony_1Frogletinachockydavid1983Tom_Hendochris500robadgerStargunnerjohnspence12stixoftwixesNurse2047Sg28southoneHFSaver2022jaceyboyJMarco 20 votes
No, Premium Bond prize money is ok as it is.
25%
poppy10_2jimjamesVNXlongleggedhairJohnjdc4justice2Ayr_Rage 7 votes

Comments

  • eskbanker
    eskbanker Posts: 37,158 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 3 August 2023 at 5:20PM
    As above, they've done nothing other than increase rates in recent times - just over 14 months ago the nominal PB rate was 1% and now it's 4% after a sequence of increases.

    However, they don't necessarily aim to correlate with base rate changes, as they're also driven by their net financing target set by the treasury, so they're not always looking for additional deposits, whereas many of their competitors chase market share as a matter of course.
  • Albermarle
    Albermarle Posts: 27,871 Forumite
    10,000 Posts Seventh Anniversary Name Dropper
    eskbanker said:
    As above, they've done nothing other than increase rates in recent times - just over 14 months ago the nominal PB rate was 1% and now it's 4% after a sequence of increases.

    However, they don't necessarily aim to correlate with base rate changes, as they're also driven by their net financing target set by the treasury, so they're not always looking for additional deposits, whereas many of their competitors chase market share as a matter of course.
    Although I guess when the PM/Chancellor are pressurising the big banks to pass on rate increases, they feel obliged to be at least going in the same direction with NS&I rates.
  • eskbanker
    eskbanker Posts: 37,158 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    eskbanker said:
    As above, they've done nothing other than increase rates in recent times - just over 14 months ago the nominal PB rate was 1% and now it's 4% after a sequence of increases.

    However, they don't necessarily aim to correlate with base rate changes, as they're also driven by their net financing target set by the treasury, so they're not always looking for additional deposits, whereas many of their competitors chase market share as a matter of course.
    Although I guess when the PM/Chancellor are pressurising the big banks to pass on rate increases, they feel obliged to be at least going in the same direction with NS&I rates.
    True, from a (current) political point of view, it might be wise for the government to be seen to be keeping pace with the market that they're simultaneously castigating, but in more general terms PBs have never been a tracker product as such.
  • bompey
    bompey Posts: 42 Forumite
    Seventh Anniversary 10 Posts
    As a PB holder then yes they should increase the prices, but they have already been doing that, and will probably increase them again from the 4% they are now.
  • RedImp_2
    RedImp_2 Posts: 546 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    Find it slightly odd someone creates an account to post this poll.

    In any case imho doesn’t actually matter what we poll on here, not going to effect the powers that be.
  • Sg28
    Sg28 Posts: 450 Forumite
    Third Anniversary 100 Posts Name Dropper
    Yes, Premium Bond prize money should be increased
    RedImp_2 said:
    Find it slightly odd someone creates an account to post this poll.

    In any case imho doesn’t actually matter what we poll on here, not going to effect the powers that be.
    Next post will probably be ramping some crypto scam.
    Ex Sg27 (long forgotten log in details)

    Massive thank you to those on the long since defunct Matched Betting board.
  • Swipe
    Swipe Posts: 5,621 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    Yes, Premium Bond prize money should be increased
    Why would anyone vote against this?
  • Johnjdc
    Johnjdc Posts: 396 Forumite
    Tenth Anniversary 100 Posts Name Dropper
    No, Premium Bond prize money is ok as it is.
    Swipe said:
    Why would anyone vote against this?

    I voted against it because the premise is faulty and I rejected the argument that "it's time to increase" when there have been multiple increases throughout the last year. 

    As a Premium bond holder I'd be delighted if they went up, but at 4% they are in the ballpark of instant access, particularly so when considering that they are tax-free. 

    As a higher rate taxpayer that means (assuming average winnings) the government is giving me £50k of savings at the equivalent of about 6.7% taxable already, instant access.

    They are a government investment scheme, so any increase over and above what they need to give to remain competitive comes out of higher taxes or lower spending on services.
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