From July 2026, the Premium Bonds prize fund rate will increase from 3.3% to 3.8%, improving the odds of winning for each £1 Bond from 23,000-to-1 to 22,000-to-1. NS&I has also raised rates on its fixed-term British Savings Bonds and Green Savings Bonds, sparking speculation about further Premium Bonds rate hikes later in the year.
Expert Predicts Possible Future Changes
George Sweeney, investing expert at comparison site Finder, noted that predicting future changes is not straightforward. He stated: "We could also see some future changes to the underlying prize rate for Premium Bonds, which are already due to rise from 3.3 per cent to 3.8 per cent for the July draw and beyond."
Sweeney explained that the Bank of England base rate decisions will influence NS&I's moves, but it is not an exact science. NS&I operates outside the rest of the savings market due to its unique goal of raising funds for the Government, rather than competing for profit. Its net financing target for the 2026/2027 tax year stands at £15 billion, excluding Green Savings Bonds.
Rate Hikes Across NS&I Products
On June 23, NS&I announced increases across several products:
- Guaranteed Growth Bonds 1-year: 4.69% (up from 4.5%)
- Guaranteed Income Bonds 1-year: 4.69% (up from 4.5%)
- Guaranteed Growth Bonds 2-year: 4.67% (up from 4.48%)
- Guaranteed Income Bonds 2-year: 4.67% (up from 4.48%)
- Guaranteed Growth Bonds 3-year: 4.65% (up from 4.45%)
- Guaranteed Income Bonds 3-year: 4.69% (up from 4.45%)
- Guaranteed Growth Bonds 5-year: 4.55% (up from 4.40%)
- Guaranteed Income Bonds 5-year: 4.55% (up from 4.40%)
- Green Savings Bonds 3-year: 4.45% (up from 3.82%)
What Could Drive Further Premium Bond Rate Changes?
Sweeney noted that if the Bank of England maintains higher interest rates for longer, it is more likely that Premium Bond prize fund rates will become more enticing later in 2026. However, he cautioned: "It all depends on how the current strategy progresses, because if NS&I raise funds at a faster rate than expected, lifting the prize fund rates for Premium Bonds would actually hinder rather than help it achieve its mandate of raising money, but not too much."
