NS&I has increased its Premium Bond prize fund rate from 1.4% to 2.2%, adding an expected £76m to its October prize fund.

The rise will see the number of £5,000, £10,000, £25,000, £50,000 and £100,000 prizes almost double.

The odds of each £1 Premium Bond number winning a prize will also improve from 24,500 to 1 to 24,000 to 1.

The Premium Bonds prize winning rate governs the monthly prize draw for tax-free prizes.

NS&I pays a yearly prize fund rate on Premium Bonds, which is equivalent to a yearly rate of interest. This equivalent amount of interest on Premium Bonds eligible for that month’s draw is then divided by 12 to give NS&I a prize fund for the monthly draw.

Premium Bond prizes are free of income and capital gains tax.

This is the second increase to the Premium Bond prize fund rate made in the last six months. NS&I increased the Premium Bond rate from 1% to 1.4% from its June prize draw.

Ian Ackerley, chief executive at NS&I, said the changes help ensure that Premium Bonds remain attractive while continuing to balance the interest of savers and taxpayers.

There are currently over 22m holders of Premium Bonds.

Andrew Griffith, financial secretary to the Treasury, said: “It’s great to see NS&I providing a boost to the nation’s savers - more than doubling the prize fund rate offered on its much loved Premium Bonds over the last six months.

“I look forward to working with Ian and the rest of the NS&I team in the months ahead, ensuring the organisation continues to deliver for both savers and the taxpayer."

NS&I increased the rates on its Green Savings Bonds, Direct Saver, Income Bonds, Direct ISA and Junior ISA, products in July and August.

Government-owned NS&I is one of the largest savings organisations in the UK, offering a range of savings and investments to 25m customers. All products offer 100% capital security as NS&I is backed by HM Treasury.