NS&I has announced the Premium Bonds prize fund rate will be cut within months.
The prize fund rate will be reduced from four per cent to 3.8 per cent from the April 2025 prize draw.
The odds of winning will remain the same at 22,000 to 1.
Andrew Westhead, NS&I Retail Director, said: "Even with the change to the Premium Bonds prize fund rate, we are expecting more than 5.9 million tax-free prizes worth over £411million to be won in the April 2025 draw."
NS&I; is reducing the Premium Bonds prize fund rate NS&I; | GETTYHow many prizes are up for grabs from April 2025?
- The number of £1m prizes will stay the same at two.
- The number of £100,000 prizes will drop from 82 to 78.
- The number of £50,000 prizes will decrease from 164 to 157.
- The number of £25,000 prizes will fall from 328 to 313
- The number of £5,000 prizes will decrease from 1,641 to 1,565.
- The number of £1,000 prizes will drop from 17,202 to 16,445.
- The number of £500 prizes will fall from 51,606 to 49,335.
- The number of £100 prizes will decrease from 1,992,297 to 1,830,825.
- The number of £50 prizes will drop from 1,992,297 to 1,830,825.
- The number of £25 prizes will increase from 1,807,915 to 2,170,903.
Sarah Coles, head of personal finance at Hargreaves Lansdown said: “NS&I is testing the loyalty of its premium bond holders.” She noted that this was expected due to a decline in easy access savings rates following the Bank of England’s rate cut.
She continued: "the cuts have focused on the bigger prizes, in order to keep the chances of a win the same.” However, she warned that most bondholders will win nothing on average and their savings may lose value due to inflation.
Coles suggested whenever the rate is cut, it’s worth considering whether "you're still happy with the deal,” and recommended exploring online banks and saving platforms for stronger rates.
In response to changes in the savings market, NS&I will also be lowering the rate on another variable product.
From Wednesday March 5, 2025, the interest rate for Direct Saver will change from 3.5 per cent to 3.3 per cent gross/AER.
For Income Bonds, the current interest rate is 3.44 per cent gross/3.49 per cent AER, which will decrease to 3.26 per cent gross/3.30 per cent AER.
However, as many savers are reviewing their ISA plan, NS&I has increased the interest rate on their account before the tax year ends.
From today, February 18 2025, the interest rate for NS&I’s Direct ISA will increase to 3.50 per cent AER, up from three per cent AER.
Premium Bonds holders can check to see if they have won a prize via the Premium Bonds prize checker app NSIDirect ISA is a cash ISA for customers aged 18 or over who are residents in the UK for tax purposes. Customers who have an NS&I Direct Saver can apply online for a Direct ISA and pay for it from their Direct Saver. Money can be taken out of the Direct ISA online or by phone, with no notice or penalty.
Westhead said: "At a time when many savers are reviewing their ISA plans, I’m glad we have been able to increase our Direct ISA interest rate for those wanting to make the most of their tax-free savings allowance.
"We regularly review our products to ensure they reflect current market conditions. The changes we are making to Premium Bonds, Direct Saver and Income Bonds rates enable us to continue to balance the interests of savers, taxpayers and the stability of the broader financial services sector."
