What Happened?
National Savings and Investments (NS&I) has announced a reduction in the Premium Bonds prize fund rate from 3.6% to 3.3%, effective from the April 2026 draw. This change will result in a decrease in the total prize money distributed, dropping from approximately £408 million in February to around £375 million in April.
Why It Matters
The cut in the prize fund rate signifies a shift in the odds of winning for bondholders, with the likelihood of winning now set at 23,000 to 1, compared to the previous odds of 22,000 to 1. This adjustment is expected to reduce the total number of prizes awarded, from 6,183,066 in February to an estimated 5,943,029 in April. While the number of £25 prizes will increase, other denominations will see a decline in available prizes.
What’s Next?
As the prize fund rate has been cut for the sixth time since September, NS&I aims to balance the interests of savers and taxpayers amidst changing conditions in the savings market. The implications of this cut may lead savers to reconsider their investment strategies, as Premium Bonds, while still popular, may offer less attractive returns moving forward.
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