Budget 2018: Premium Bond minimum to be lowered to £25
The minimum amount you can save in Premium Bonds will be cut to £25, and people other than parents and grandparents will be able to gift bonds to children, the Chancellor has announced.
Currently the minimum amount you can save is £100 (or £50 by standing order), but this will be cut to £25 by the end of March 2019 – for both one-off purchases and regular savings.
The maximum Premium Bond holding will remain at £50,000.
Additionally, adults other than parents and grandparents will be able to purchase bonds for children under 16, though National Savings & Investments (NS&I) hasn't given a timescale for this yet.
The person purchasing the bonds for children will have to be over 16, and must nominate one of the child's parents or guardians to look after the bonds until the child turns 16.
NS&I will also launch a new Premium Bonds app in the new year 'to make saving easier'.
For more on how Premium Bonds work – and whether they're worth it – see our Premium Bonds guide.
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What are Premium Bonds?
Premium Bonds are essentially a savings account you can put money into, where instead of earning interest, tax-free prizes are awarded in a monthly prize draw – meaning there's no guarantee you'll get any return on your money.
Prizes range from £25 to £1 million. In September 2018, there were 3,117,186 prizes won, with a total value of £89,099,575.
It's worth bearing in mind that the nearest thing Premium Bonds have to an interest rate is an annual prize rate, which means 'on average' the annual return is 1.4% – but in reality, this is just a vague benchmark and there's no guarantee you'll win anything at all. See our Premium Bonds guide for full info.
What does NS&I say?
NS&I chief executive Ian Ackerley said: "Premium Bonds have helped tens of millions of people to save since their launch in 1956 and these new improvements will make Premium Bonds more accessible.
"Customer feedback is always an important part of our decision-making, and we found that the current £100 minimum purchase was too much and recognised that people other than parents or grandparents wanted to gift Premium Bonds to children.
"By lowering the minimum investment and making gifting for children accessible to all adults, we are extending the opportunity for more people to save and trying to encourage a savings habit, especially among younger people. This supports a strong savings culture for families in a product that has spanned the generations, and for those who want to save little and often."
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