Consumer champion Martin Lewis has sounded the alarm for millions of Premium Bonds holders across the UK in his latest money-saving bulletin. The founder of MoneySavingExpert.com revealed a critical oversight that could be costing British savers thousands in potential tax-free winnings.
The Premium Bonds Shake-Up You Can't Afford to Miss
During his recent appearance on ITV's The Martin Lewis Money Show, the financial guru highlighted significant changes to National Savings and Investments (NS&I) Premium Bonds that demand immediate attention from the estimated 21 million Britons who hold them.
'This is a must-check situation for every Premium Bonds holder,' Lewis emphasised, explaining that NS&I has been automatically transferring older bonds into newer, higher-paying versions without many customers realising.
How the NS&I Update Affects Your Savings
The crucial development involves bonds purchased before 2015, which have been systematically upgraded to modern equivalents offering better prize fund rates. However, many savers remain unaware of this automatic transition and its implications for their winning chances.
Lewis stressed: 'If you've got older Premium Bonds, you need to understand that the prize fund rate has changed dramatically. We're now looking at rates that make them genuinely competitive with other savings vehicles.'
Why This Matters for Your Wallet
The current Premium Bonds prize fund rate stands at 4.40%, with NS&I distributing tax-free prizes worth millions each month. The maximum holding has also increased to £50,000 per person, making them a substantial part of many families' savings strategies.
Key points every Premium Bonds holder should know:
- All bonds now compete for prizes at the same rate regardless of purchase date
- Monthly prize draws include everything from £25 to the coveted £1 million jackpot
- Winnings remain completely tax-free - a significant advantage over traditional savings
- The odds of winning per £1 bond have improved to 21,000 to 1
Martin Lewis's Essential Premium Bonds Checklist
The money expert urged viewers to take three immediate actions:
- Check your NS&I online account or paper statements to confirm your holding value
- Ensure your contact details are current to receive prize notifications
- Consider whether Premium Bonds fit your overall savings strategy given current rates
'For basic rate taxpayers, that 4.40% prize fund rate is equivalent to a 5.5% savings account once you factor in tax,' Lewis calculated, highlighting why Premium Bonds have become increasingly attractive in the current high-interest environment.
With the Bank of England base rate remaining elevated, the Money Saving Expert's intervention comes at a critical time for British savers looking to maximise their returns while maintaining financial security.
