# NS&I ‘pulling out all the stops’ in Premium Bonds and savings rates boost

By Sarah Coles — 2026-08-18

Sarah Coles, head of personal finance at AJ Bell, says NS&I Premium Bond holders will be delighted with another price hike to the prize rate, giving them more opportunities to win from September’s draw.

She said: “NS&I is pulling out all the stops to attract the cash it needs.

“It has decided there’s no point tinkering around the edges: a raft of rates had to rise – including pulling the trigger on the big gun of Premium Bonds.

“It’s getting unusually competitive in the short-term fixed rate market – offering 4.82 per cent over one year, at a time when the best deal is 4.85 per cent.

“Given that this is the most popular term to fix your savings over, it’s clearly hoping to persuade rate-chasers to make a small compromise in order to secure a rate that’s 100 per cent backed by the Treasury.

“There are better deals on offer elsewhere – especially if you are fixing for longer – so if the rate is the most important thing to you, you can find a more rewarding home for your money.

“However, getting so close to the most competitive deals could be enough to tempt some savers into the NS&I fold.

“Premium Bond holders will be delighted with the second hike in two months to the prize rate. It’s a decent jump, and is accompanied by a shortening of the odds.

“For those who have stuck with the bonds through thick and thin, they’ll be grateful things are getting thicker.

“Of course, it doesn’t change the fact that in an average month the average bond holder will win nothing, and will lose money after inflation, so if you need to hang onto your spending power, you may prefer the certainty of a savings account.

“If you shop around, there are some great rates around at the moment – particularly from online banks and savings platforms.

“The impressive fixed rate deals on offer across the market are partly the result of base rate expectations, but a huge part is banks competing hard for sticky money.

“Moneyfacts figures show we haven’t seen this many bank accounts beating the base rate since 2012. Three-year and five-year bonds are now offering more than five per cent, and shorter fixes are hovering nearby.

“At the same time, NS&I is pushing for a net financing target of £15 billion this financial year. So far, inflows haven’t been much to write home about – and April actually saw more money withdrawn than added, so it couldn’t sit back and hope for improvements, it had to do something fairly striking to move the dial.”

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