Premium bond limit rises to £50,000 on 1 June 2015
The amount you can invest in premium bonds rises from £40,000 to £50,000 on Monday 1 June 2015.
On that date, the maximum limit will have risen by £20,000 in little over a year. Only one year ago was the former upper limit of £30,000 increased to £40,000, at which point a second £1 million prize was also introduced.
For the first time, parents and legal guardians will be able to buy premium bonds for their children aged under 16 online or over the phone from 1 June. Previously this was only possible by post or in person at the Post Office.
Some £19.7 billion has been invested in premium bonds since 2003 - which represents an increase of 169% - when the £30,000 limit replaced the former £20,000 ceiling.
As well as the two tax-free £1 million monthly jackpots, premium bonds create more than two million other prizes, ranging from £25 to £100.
While no interest is paid on premium bonds, and prizes are not guaranteed, savers' money is 100% secure, as it is backed by the government's retail bank - NS&I.
The minimum investment is £100, which buys 100 £1 bonds. The odds of winning for each £1 premium bond number are currently 26,000 to 1 and since the first prize draw in June 1957, there have been more than 316.2 million winners.
How much money in prizes is paid each month out is based on the prize fund rate and how many bonds in the draw so the more money invested in the bonds, the higher the overall value of prizes. At the moment, the annual prize fund interest rate is 1.35%.
Bond holders can check if they are winners at nsandi.com/prize-checker from the third day of the month. May's two £1 million prize winners were a woman living overseas who had £20,975 invested and another lady from the Wirral, who had £30,000 invested. The total prize fund was £61 million.
Jane Platt, NS&I's chief executive, said: "Premium bonds are one of the nation's favourite ways to save. Last year we saw a huge level of interest when we raised the limit from £30,000 to £40,000 and this latest increase to £50,000 is further good news for customers who want save more and to give themselves extra chances to win a tax-free prize."
Harriett Baldwin, economic secretary to the Treasury, added: "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."
A form of National Savings Certificate, premium bonds are effectively gilt-edged securities: you loan your money to the government and, in return, it pays you for the privilege with a guarantee it will return your capital at a specified date. Where premium bonds differ is that the interest payments (currently 1.5%) are pooled and paid out as prize money and you can get your cash back within a fortnight, with no risk. Launched by Chancellor of the Exchequer Harold Macmillan in his 1956 Budget, every single £1 unit has the same chance of winning and in May 2011, 1,772,482 winners (from a total draw of 42,539,589,993 eligible bond numbers) shared £53,174,500. The odds of winning are 24,000 to 1 and the maximum holding is £30,000 per person but it remains the only punt in which you can perpetually recycle your stake money.