Budget 2014: £1m Premium Bond prize pot doubled

Individuals will now be able to invest an additional £10,000 in premium bonds from 1 June 2014, taking the limit to £40,000, the government announced today.

The investment limit then rises to £50,000 in 2015/16, chancellor George Osborne announced in his Budget speech.

The government also said the number of monthly £1 million premium bond prizes will double from one to two a month, with effect from the August 2014 prize draw.

Jane Platt, chief Executive of National Savings & Investments (NS&I), which operates premium bonds, said: "Premium Bonds are unique and hugely popular with our customers."

"Increasing the number of £1 million prizes per month to two, will add to the excitement that our savers might win a big prize in the monthly prize draw and, increasing the limit on the amount that can be invested in Premium Bonds is something that hasn't been done for over a decade."

It is also launching a range of new savings products, including a "pensioners' bond" – a savings bond for people aged over 65. This will pay 2.8% over one year or 4% over three years.

NS&I is able to launch these products, as well as raise the premium bond investment limit and prize pot by accepting a larger influx of funds in the next two to three years.

The organisation said the odds of winning a monthly £1million jackpot prize will double, but did not say what the odds on winning the prize would be for someone holding the new amount of either £40,000 or £50,000 worth of premium bonds.

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It would be many, many million times better if there were no 'prizes' of £1 million, but a couple of hundred of £100,000. That would make lots of people very happy, and those who hankered after a million could buy a lottery ticket.