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Hard-pressed savers can now invest in Premium Bonds with as little as £25, after National Savings & Investments (NS&I) cut the minimum investment requirement for the first time in 63 years.
Previously customers had to deposit at least £100 to purchase Premium Bonds, but this threshold has been lowered to encourage young people to invest and to make it easier for customers to make small investments on behalf of their children and grandchildren.
The Government-backed NS&I said it hoped the change would encourage customers of all ages to invest small sums on a regular basis, with regular standing orders for £25 also now permitted. The upper limit for investment remains at £50,000 per customer.
Savers have turned to Premium Bonds in large numbers in recent years, preferring to take a chance on prize payouts rather than stick with high street savings accounts offering paltry rates of interest.
Monthly prizes range from £25 to two £1m top prizes, with the odds of winning a prize standing at 24,500 to 1.
The amount invested in Premium Bonds reached £79bn by the end of 2018, a sharp increase on the £65bn balance two years earlier.
Ian Ackerley of 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.”
NS&I said it would soon allow adults to purchase Premium Bonds for all under 16s, meaning they can be gifted to nieces, nephews, godchildren or family friends in addition to children and grandchildren.
But recent changes made by NS&I have not all been positive. It has been criticised for changing its long-standing inflation-linked accounts to a lower measure of inflation, meaning more than 500,000 customers will see their returns cut from May 2019.
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