Premium Bonds Limit Increased

Following the success of the Pensioner Bond, it has been announced that the maximum investment in Premium Bonds has been increased to £50,000 from 1 June 2015. This £10,000 increase comes just a year after the maximum investment increased from £30,000 to £40,000.

Premium bonds offer tax-free returns in the form of a monthly prize draw. The minimum investment is £100 per person. A nominal interest rate of 1.35% is used to calculate the prize fund but there are obviously some Premium Bond holders that do better than others. There are two £1 million jackpot winning numbers drawn every month and over 2 million other prizes ranging from £25 to £100,000 in value. Since 2003, the total amount invested in Premium Bonds increased from £19.7 billion to over £53 billion. The total is expected to increase even further with the latest increase in the amount of money that can by invested.

In addition to the changes to the Premium Bonds limit, since Monday 1 June 2015 parents or legal guardians can now purchase Premium Bonds for their children directly online or by phone for the first time. Previously, parents could only buy by post, or at a Post Office branch, but they can now purchase Bonds for their children (so long as they are under 16) through the internet or over the phone.

Commenting on the changes, the Economic Secretary to the Treasury, Harriett Baldwin said:

‘Our long term plan is all about supporting savers and boosting working people’s financial security at all stages of life. That’s why we have increased the amount people can invest in Premium Bonds for the second time in two years. As a result of our changes people will be able to invest up to £50,000 tax free, and 100% backed by the government.’