NS&I is raising the Premium Bonds prize fund rate to 4.35% from 3.80%, starting with the September 2026 draw. The odds on each £1 bond improve at the same time, from 22,000 to 1 to 21,000 to 1. Both measures were last improved in July 2026.
More than 22 million people hold Premium Bonds. The September pot will grow by around £63 million to over £497 million, which NS&I estimates means more than 308,000 extra prizes compared with August. Expect 12 more £100,000 prizes, 27 more at £50,000 and 51 more at £25,000. There will also be over 2.3 million prizes of £100, and more than 6.5 million prizes in all.
“This is the second time this year we have been able to increase Premium Bonds prize fund rate and shorten the odds,” said Andrew Westhead, NS&I Retail Director. He said the changes, and the other rate rises announced the same day, reflect current market conditions and help NS&I meet its Net Financing target. That target for 2026-27 is £15 billion, give or take £4 billion.
Four other products also move
The announcement, dated 18 August, covered more than Premium Bonds. Rates rose immediately on Direct Saver, which now pays 3.75% gross/AER and has around 428,000 customers, and on Income Bonds at 3.69% gross/3.75% AER, with around 222,000 customers. Both were last raised in May 2026.
British Savings Bonds also improved. New one, two, three and five-year Issues of Guaranteed Growth Bonds and Guaranteed Income Bonds replace those that went on sale on 31 July. Customers whose bonds mature from 18 August get the new rate automatically.
How the product works
Premium Bonds pay no interest. An annual prize fund rate pays for a monthly draw, and each £1 bond is an entry. Prizes run from £25 to £1 million and are free of UK Income Tax and Capital Gains Tax. Savers can hold up to £50,000, children under 16 included, and can withdraw at any time. HM Treasury backs the money in full. The scheme has run since November 1956.
