NS&I has announced it is reducing the Premium Bonds prize fund rate to 3.30% with effect from its April 2026 draw. The change lowers the rate to 3.60% and lengthens the odds for each £1 bond to 23,000 to 1 from 22,000 to 1.

The Premium Bonds prize fund rate was last changed in August, and the odds in December 2024. Andrew Westhead, NS&I Retail Director, said: “This change to the Premium Bonds prize fund rate and odds reflects changes in the wider savings market, and ensures we continue to balance the interests of savers, taxpayers and the wider financial services sector.”

Mr Westhead said Premium Bonds continue to be the most popular UK savings account.

He added that having recently passed £40billion in prizes drawn, NS&I expects the April draw to have close to six million tax-free prizes worth around £375million.

NS&I’s Retail Director said: “Premium Bonds maintain their unique appeal by offering 100% security, the flexibility to withdraw easily, and the excitement of potentially winning a tax-free prize each month.”

While NS&I’s prize fund rate drops from April’s draw, it estimates two savers will scoop the top prize of £1million. The number of people winning the lowest prize of £25 is expected to rise from 2,643,007 to 2,806,003.

But prize amounts in between are all expected by NS&I to see a drop.

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The number of people winning £100,000 drops from 78 to 71, while those scooping £50,000 falls from 154 to 143, according to NS&I’s estimate.

The prize fund rate change from April will be the 25th such change since May 2008. Its highest prize fund rate over that period was 4.65% in September 2023, while the lowest was 1% in December 2020 and April 2009.

Premium Bonds were introduced in November 1956, offering savers the chance to win prizes free of income tax and capital gains tax.

Instead of paying interest, there’s an annual prize fund rate which funds a monthly draw. Each £1 bond purchased is entered into a monthly prize draw.

NS&I said there are more than 22 million Premium Bonds holders in the UK. Savers can hold up to £50,000 in Premium Bonds. All NS&I’s products are backed by HM Treasury.