More life-changing Premium Bonds prizes up for grabs from January

Premium Bonds customers are set for a new year boost, with an extra £80 million in prizes up for grabs from the January prize draw.

Provider NS&I said the prize fund rate will increase from 2.20% to 3.00%, with more opportunities to win life-changing sums of cash.

The changes will see the January 2023 prize fund hit an expected £299,572,750.

There will be an estimated 56 chances to win £100,000, up from 18 in December.

And there will be an estimated 112 £50,000 prizes, up from 36 in December.

The number of £1,000,000 prizes will remain the same, at two.

More than 570,000 customers holding Direct Saver and Income Bonds will also benefit from Tuesday, as the interest rate on both products increases from 1.80% to 2.30%.

The rate on Direct Saver is now at its highest level since the account was launched in March 2010, while the interest rate on Income Bonds is the highest it has been since February 2009.

NS&I, which is backed by the Treasury, said the changes will mean its products are priced appropriately when compared with the rest of the savings market and ensure that NS&I continues to balance the interests of savers, taxpayers and the broader financial services sector.

NS&I chief executive Ian Ackerley said: “The new year increase to the Premium Bonds prize fund rate will mean that customers will have seen the prize fund rate triple in less than a year.

“This means a bigger prize pot and more higher value prizes for our customers – a great way to start 2023.”

Sarah Coles, senior personal finance analyst, Hargreaves Lansdown, said NS&I has “gone to town with more life-changing sums”.

She said: “It’s a clever move at a time when we know people are searching for a solution to the financial dead end they’ve found themselves in.

“We know prize draws become far more tempting at times like this, so Premium Bonds are positioning themselves as the ultimate game of chance – with your money back if you lose.

“However, before you’re dazzled by the new prizes, it’s important to be aware of what’s involved when you buy Premium Bonds, and the impact of focusing on bigger prizes.

“Despite the average prize rate rising, there are absolutely no guarantees you’ll get anything like this, because the odds of a win are still 24,000 to one.”