NS&I to cut Premium Bond prize rate to 3.6% from August
NS&I will cut its Premium Bond prize-fund rate to 3.6% from 3.8% – are they still worth it? Martin Lewis' MoneySavingExpert.com explains.
www.moneysavingexpert.comHere’s the latest on Premium Bonds from NS&I and recent coverage in UK media.
- NS&I has continued to trim the Premium Bonds prize fund rate over 2024–2025. The rate was cut to 4% for January 2025 draws, then further reductions followed, with reports in mid-2025 showing rates around 3.6% for August 2025 draws and ongoing adjustments since. These changes mean the chance of winning remains 22,000 to 1 per £1, and the total prize fund fluctuates with each draw.[1][2][3]
- Media analysis generally notes that Premium Bonds offer security and tax-free prizes, but the expected return is often lower than typical cash savings accounts once prize odds are considered, especially when standard savings rates rise. Several outlets suggest weighing the tax-free prize potential against the certainty and liquidity of cash savings, particularly when comparing to cash ISAs or high-street easy-access accounts.[3][4]
- Practical guidance from consumer sites continues to emphasize that Premium Bonds suit savers who value security and the excitement of a possible large prize, rather than those seeking the highest guaranteed yield. For many, cash ISAs or high-yield savings accounts now deliver higher expected returns on average, even after accounting for the tax-free nature of Premium Bonds.[9][3]
Illustration: If you hold £1,000 in Premium Bonds and the prize fund rate is 3.6%, the expected monthly prize value is still a probabilistic outcome with a 22,000-to-1 win odds per bond; most months you may win small prizes or nothing, while a tiny chance exists of substantial payouts in a given draw. For a more predictable return, plain cash savings accounts with higher guaranteed rates may outperform Premium Bonds on a cash-equivalent basis, depending on current offers.[2][3]
If you’d like, I can pull the latest numbers for the present draw date and compare with current top cash savings rates in your area or provide a quick calculator to estimate expected prize earnings at different balances. Please tell me if you want a short comparison table or a simple running summary with links to the key sources.
Note: The above reflects recent coverage from MoneyWeek, MoneySavingExpert, and NS&I announcements through 2025. For the very latest draw-rate updates in 2026, I can fetch fresh sources if you want me to.[1][2][3]