TL;DR
NS&I will raise the Premium Bonds prize fund rate from 3.30% to 3.80% from the July 2026 prize draw. The odds on each GBP 1 bond shorten from 23,000 to 1 down to 22,000 to 1. The July draw will pay around 322,000 more prizes than the May and June draws, with an extra 12 prizes of GBP 100,000, 24 prizes of GBP 50,000 and 49 prizes of GBP 25,000 added to the upper tiers.
Last reviewed: 2 June 2026
National Savings and Investments has confirmed that the Premium Bonds prize fund rate will rise from 3.30% to 3.80% from the July 2026 prize draw, reversing part of the cut announced in April. The change shortens the odds on each GBP 1 bond from 23,000 to 1 down to 22,000 to 1 and adds an estimated 322,000 extra prizes to the July draw compared with the May and June draws.
Key facts
- Prize fund rate rises from 3.30% to 3.80% from the July 2026 draw.
- Odds shorten from 23,000 to 1 to 22,000 to 1 per GBP 1 bond.
- Around 322,000 additional prizes added to the July prize pot versus May and June.
- Two GBP 1 million jackpots remain per draw. The June 2026 winners were in Leeds and Cheshire West and Chester.
- Total Premium Bonds holdings stand at roughly GBP 127 billion across 24 million savers.
What changes from the July 2026 draw
From the July 2026 prize draw, every GBP 1 bond held in Premium Bonds has a 22,000 to 1 chance of winning a prize, down from 23,000 to 1 in June. The headline prize fund rate, which is the notional annual return a saver with average luck would receive across all bonds, rises from 3.30% to 3.80%. NS&I has confirmed the July draw will include 12 additional GBP 100,000 prizes, 24 additional GBP 50,000 prizes and 49 additional GBP 25,000 prizes versus the June draw, with the bulk of the extra prizes sitting in the GBP 25, GBP 50 and GBP 100 tiers.
Why NS&I has moved the rate up
NS&I is a Treasury-backed savings provider with a published duty to balance the interests of savers, taxpayers and the wider savings market. When NS&I needs to raise funding for the government, it lifts rates to attract new deposits. When it has reached its annual net financing target, it tends to trim rates to avoid distorting the wider easy access and fixed bond market. The April 2026 cut reduced the prize fund rate from 3.80% to 3.30% and lengthened the odds. The July reversal points to renewed appetite at NS&I for retail deposits in the second half of 2026.
How the prize fund rate is not an interest rate
The prize fund rate is the notional figure NS&I uses to describe the total prize pot divided by total bonds held, expressed as an annual percentage. It is not an interest rate paid to any individual saver. Most Premium Bonds holders win nothing in a given month. A saver with the maximum GBP 50,000 holding has, on average, a roughly 70% chance of winning at least one prize each month at 22,000 to 1 odds, but the median annual return for that holding is meaningfully below the 3.80% headline. Easy access savings accounts at the top of the market are paying above 4.00% AER, and the best one year fixed bonds currently pay above 4.50% AER, both of which are taxable above the personal savings allowance.
What this means for savers comparing Premium Bonds with cash savings
For a basic rate taxpayer with savings outside an ISA, Premium Bonds remain attractive because prizes are tax free, which boosts the effective yield relative to taxable interest above the GBP 1,000 personal savings allowance. For higher and additional rate taxpayers, where the personal savings allowance falls to GBP 500 and zero respectively, the tax shield matters more. A higher rate taxpayer with savings producing GBP 2,000 of interest a year would face GBP 600 of tax on the GBP 1,500 above the allowance, which would not arise on Premium Bonds prizes. The trade off remains the variance of outcomes: Premium Bonds will pay nothing in many months, while a cash ISA at 4.00% pays a guaranteed monthly figure.
Bereavement claims and the GBP 476 million NS&I error
Separately, NS&I has acknowledged a long running error in its bereavement claims process which has left an estimated GBP 476 million of payments owed to roughly 37,500 estates of deceased savers. NS&I has published a delivery plan and has begun contacting affected estates. Beneficiaries who believe an estate may be affected should contact NS&I directly through the bereavement line published on nsandi.com.
Important
This article is general information about a government backed savings product and is not personalised financial advice. Returns on Premium Bonds are highly variable. Compare the prize fund rate against guaranteed savings rates that are equivalent on a tax adjusted basis before moving funds.
Common questions
When does the new 3.80% prize fund rate take effect?
The new rate applies from the July 2026 prize draw. The June 2026 draw used the previous 3.30% rate and the old 23,000 to 1 odds.
Will my existing Premium Bonds automatically benefit from the higher odds?
Yes. The rate and odds apply to all bonds held at the point of the draw. Holders do not need to take any action.
Are Premium Bonds prizes still tax free?
Yes. All Premium Bonds prizes remain free of UK income tax and capital gains tax, including the GBP 1 million jackpots.
What is the maximum holding?
The maximum holding per individual is GBP 50,000. The minimum purchase is GBP 25.
