Premium Bonds odds are set to improve to the best levels seen in nearly 15 years in August.

Provider NS&I said there will be “more prizes, more excitement and more life changing wins” from the August prize draw, with prize fund rate increasing to 4 per cent from 3.70 per cent – its highest level since 2007.

The odds will improve to 22,000 to one from 24,000 to one.

NS&I said the move means that each £1 bond will have its best chance of winning a prize in nearly 15 years.

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It estimates that the changes will see an extra £30 million added to the prize fund from August, with an estimated 460,000 extra prizes up for grabs.

The estimated number of £1 million prizes will remain at two, the same as in July.

There will be an estimated 77 £100,000 prizes in August, up from 71 in July.

And an estimated 154 £50,000 prizes will be available, jumping from 141 in July.

The interest rates that NS&I pays on its direct saver and income bonds accounts will also increase to 3.40 per cent, from 2.85 per cent, effective from July 13.

NS&I chief executive Dax Harkins said: “Premium Bonds are one of the nation’s favourite savings products and I’m delighted that we’re able to improve the odds to the best they have been in almost 15 years, with more prizes, more excitement and more life-changing wins for savers up and down the country.

“These changes will benefit millions of NS&I’s savers who have money in Premium Bonds, direct saver and income bonds.”

Also effective from July 13, NS&I will be increasing the interest rate that it pays on its investment account to 0.85 per cent from 0.60 per cent.

NS&I, which is backed by the Treasury, said the changes will help ensure its products remain attractive to customers and that it continues to balance the interests of savers, taxpayers and the broader financial services sector.

The savings giant, which has more than 24 million customers, released its annual report for 2022/23 on Thursday, showing that it had overshot its net financing target.

When customers invest in NS&I products, they are lending to the Government. In return, the Government pays interest or prizes for Premium Bonds.

It said on Thursday: “At the very end of the financial year, following uncertainty in the US banking sector, NS&I unexpectedly received a number of high-value deposits which took it over the upper end of the target range.

“In the opening months of 2023/24, NS&I saw deposits return to more normal levels.”