Aunts, uncles and family friends can now buy Premium Bonds for kids

Previously only parents and grandparents could buy Premium Bonds for under-16s.

But from today, anyone aged over 16 can gift Premium Bonds to kids, meaning aunts, uncles and family friends can buy them as well. The Premium Bonds themselves will still be managed by the child's nominated parent or guardian.

The changes were announced in last year's Budget, which also cut the minimum amount you can save in Premium Bonds to £25 from £100 (or £50 by standing order).

For more on how Premium Bonds work – and whether they're worth it – see our Premium Bonds guide.

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 draw with prizes ranging from £25 to £1 million – meaning there's no guarantee you'll get any return on your money.

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.

If you'd rather put savings for a child in an account which earns interest, our Best Children's Savings guide has full help.

See our Premium Bonds guide for full info and drill down into your chances of winning with our Premium Bonds Calculator.

How can I buy Premium Bonds for a child?

From today, anyone can buy Premium Bonds as a gift for a child aged under 16, even if you're not related to them.

You can buy Premium Bonds for a child online or by sending a form to Freepost NS&I Sales. If you're buying Premium Bonds for your own child, you can also do this online, by sending a form in the post, or by calling NS&I on 08085 007 007.

But remember that regardless of who buys the Premium Bonds, only the child's parent or legal guardian can be responsible for looking after them until the child's 16th birthday, and they'll be sent the details of any prizes the child wins – so double-check that the parent or guardian's happy with this before you buy.

When you apply for Premium Bonds, you'll need to include some details about the child you're buying for and their nominated parent or guardian, so it's worth checking these with the parent or guardian before you start (and let them know that NS&I might be in touch with them to make sure these details are correct). You'll need to include:

• Your details, including your date of birth and address.

• Details of the child you're buying for, including their full name, date of birth and address.

  If the child already has a Premium Bonds holder's number, you'll need to know this as well.

• Details of the child's parent or legal guardian, who you'll be nominating to look after the bonds until the child turns 16. This will include their full name, date of birth and address.

Once you've bought the Premium Bonds, you'll be sent an acknowledgement, although the confirmation will be sent to the child's nominated parent or guardian.

You can also ask NS&I to send you a paper or electronic gift card showing the investment to give to the child.