What Happened
National Savings & Investments (NS&I) has announced significant changes to its Premium Bonds scheme, effective from the April 2026 draw. The odds of winning a cash prize will increase from 22,000 to one to 23,000 to one. Additionally, the prize fund rate will be reduced from 3.60% to 3.30%, meaning that for every £10,000 invested, bondholders can expect an average payout of £330, down from £360.
Why It Matters
This decision has raised concerns among millions of Premium Bondholders, as it reflects a broader trend in the savings market. According to Andrew Westhead, NS&I Retail Director, the changes aim to balance the interests of savers, taxpayers, and the financial services sector. Despite the cuts, NS&I anticipates that the April 2026 draw will still feature nearly six million tax-free prizes, totaling around £375 million.
What’s Next
As the prize fund rate decreases, the total number of prizes is expected to decline from February’s total of 6,183,066 to approximately 5,943,029 in April. However, the number of £25 prizes will see an increase, while the number of £1 million prizes will remain unchanged at two per month. This marks the sixth reduction in the prize fund rate since September, prompting bondholders to reconsider the viability of Premium Bonds as a savings option.