Source link The Premium Bond prize rate is set to hit its highest point for 14 years, leaving UK savers with the potential to win tax-free prizes of up to £1 million.
Chancellor Rishi Sunak announced on Tuesday that the prize rate for Premium Bonds would be increased to 1.5%. This is the highest rate Premium Bond holders have seen since 2006, when it was sitting at 1.8%. This announcement is part of the government’s strategy to help boost savings amid the coronavirus pandemic.
Premium Bonds are a popular savings option and are backed by the UK government. Bond holders are entered into a monthly prize draw and could win anything from £25 to the jackpot prize of £1 million. While these prizes are tax-free, the bonds themselves do not pay any interest.
Experts are hopeful that this higher prize rate could encourage more people to put money aside. Recent data from NS&I, the government-backed savings organisation that administers Premium Bonds, shows that despite record low interest rates, two thirds of Brits are not saving for their future.
Given the current economic difficulties brought about by the pandemic, more people than ever should consider savings products. However, it is important to remember that saving shouldn’t be at the expense of current commitments and financial needs.
When it comes to saving, it is not only investment options, such as Premium Bonds, that should be considered. The most important thing is to find a product that suits your personal situation. Whether that be a deposit account, a current account, a cash ISA or something else, it is important to make sure that your savings are right for you.
So, if you are looking for a way to save for the future, Premium Bonds could be a great option. With 1.5% prize rate now available, Premium Bond holders have the chance to win big, tax-free prizes.