Britons invested a further £1.5 billion in Premium Bonds in the year to April, despite the fact that National Savings & Investments (NS&I) saw the total amount invested with it fall by £2.6 billion over the same period.
Investment in Premium Bonds grew by £1.5 billion in the year to April as Britons invested almost twice as much in Premium Bonds as they had in the year before. This brings the total in the Premium Bond pot to £43 billion.
The prize fund “rate”, however, remains at just 1.5%. This is the level of return on their investment savers can expect if they have “average luck”. While this is significantly lower than many other savings accounts and ISAs, savers are still attracted to Premium Bonds by the chance to win big prizes.
The increase in the amount invested in Premium Bonds contrasts sharply with other investments in NS&I, which fell by £2.6 billion overall over the period.
This was in part due to more than £2.9 billion in Guaranteed Income and Guaranteed Growth Bonds maturing, while funds in ISAs, Income Bonds and the NS&I’s Ease Access Savings Account also fell.
Jane Platt, chief executive of NS&I said that it had met its target for the year despite the net reduction in investments.
Moneyhighstreet comments: “Premium Bonds provide a secure place for your savings – and some appealing prizes – but as savers begin to feel the bite of inflation, higher rates are taking precedence over safety.
“Not only are new savings accounts offering higher rates, but many are offering bonus rates on top of their usual rate for a fixed period to attract new customers.
“To find the best rates for your savings, start by comparing both savings accounts and cash ISAs online.”