You can now invest in Premium Bonds with only £25
This represents the first time that the minimum has been lowered since Premium Bonds launched 63 years ago.
The change will allow adults who are over the age of 16 to purchase or set up a standing order for a minimum of £25. Alternatively, it will be possible to gift at least £25 to children or grandchildren.
This new rule was first announced in the October 2018 Budget. It forms part of a raft of changes to Premium Bonds, which will be introduced throughout the year. The aim is to encourage regular saving and gifting into the bonds.
Other changes include allowing savers to set up standing orders to purchase a minimum of £25 to save on a regular basis, which marks a change from the current minimum of £50.
During the course of the year, parents and grandparents will be able to purchase bonds for a minimum of £25 for under 16s, as well as setting up a standing order.
NS&I also plans to allow adults to purchase Premium Bonds for under 16s. For example, as a gift for nieces, nephews, godchildren or family friends.
The news comes as February’s Premium Bonds millionaires were announced: there were two winners from Devon and Humberside with bond numbers 196XA565201 and 227WY22783.
Ian Ackerley, chief executive at NS&I, said: “Lowering the minimum investment on Premium Bonds is part of how we can support a stronger savings culture across the country and help those who want to be able to save little and often, and for those who want to give the gift of savings to their loved ones.”
Sarah Coles, personal finance analyst an investment platform Hargreaves Lansdown, added: “Lowering the minimum payment will open them up to even more people, and having a more affordable monthly minimum will help them build a robust regular savings habit.”
She added that allocating money to Premium Bonds means you pay the price that your cash isn’t earning interest, so unless you win prizes, it won’t be keeping pace with inflation.
“Over the long term, this could start to eat away at the spending power of your cash, so it’s important that Premium Bonds sit alongside other options with a better chance of keeping pace with rising prices,” she added.