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23 September 2009 Premium Bond prize fund up by 50%

Premium Bond payouts are to increase by 50%, adding an extra 500,000 winners to the monthly prize list.

National Savings and Investments (NS&I) has announced that from October 1.75 million savers will receive a prize, which could range from £25 to £1 million. In addition, the prize fund will rise from £33.8 million to £52.5 million.

NS&I hopes the move will attract new savers and boost the return rate for existing Bond holders.

It follows calls from consumers to improve return for investors, after the prize rate was cut from 1.8% to 1% earlier this year.

Experts have claimed that next month’s 50% increase in payouts will boost the average saver’s return rate to 1.5%.

‘Premium Bonds are hugely popular with our customers and we know that winning prizes frequently is particularly important to them,’ said Peter Cornish from NS&I. ‘These changes mean we can increase the frequency of an envelope from ERNIE dropping on their doormat.’

More than 23 million consumers have £40 billion invested in Premium Bonds, making them the UK’s most popular savings product.