NS&I listens and lifts its rate AGAIN

FIRST, the good news. Government-backed savings giant NS&I has listened to the readers of this column (again) – and for a second time in as many months pushed up the prize rate on Premium Bonds.

The bad news? Well, the increase is not as generous as it should be.

The effective annual interest rate is rising next month from three to 3.15 per cent – below the 3.5 per cent we collectively called for.

But as my dear mother Helen would say when I got a second-hand Action Man for Christmas – rather than a brand spanking new one – beggars can’t be choosers.

The higher prize rate will be in situ when the February draw takes place on Wednesday.

It will mean more winners in all prize categories bar £1 million (two winners per month) and £25. Although the Bank base rate should jump a day later from 3.5 per cent to 4 per cent – making some bestbuy savings accounts relatively more attractive – I would stick with your Premium Bonds.

They provide a bit of fun in a world where fun is in short supply.

As NS&I chief executive Ian Ackerley said a few days ago, the prize rate is at its highest level in more than 14 years when, between May and November 2008, it stood at 3.4 per cent.

For those with Premium Bonds in their portfolio, good luck for Wednesday. I trust you get a message from NS&I stating you are a winner (I’m keeping fingers crossed).