Premium Bonds Prize Fund Cut lowers odds and will shrink big prizes from April 2026
The premium bonds prize fund cut will take the annual prize-fund rate from 3. 6% to 3. 3% from the April 2026 draw, and lengthen the odds for each £1 bond to 23, 000-to-1 from 22, 000-to-1, changing both the headline rate and chances for millions of savers.
Premium Bonds Prize Fund Cut will reduce number of big prizes
The change will reduce the number of higher-value prizes: the number of £100, 000 prizes will fall from 78 in the most recent draw to an estimated 71 in April, £50, 000 prizes will drop from 154 to 143, and £25, 000 prizes will fall from 311 in February to 285. The odds were last adjusted in December 2024 and the prize fund rate was last changed in August 2025.
How the prize rate has moved since 2023
The prize rate peaked at 4. 65% in late 2023, then fell through a series of reductions that took it from 4% in January to 3. 6% by August. The rate has been 3. 60% since August 2025 and will go down to 3. 3% from the April 2026 draw. That figure is a variable average tied to movements in the wider savings market and the Bank of England base rate; the 3. 3% is an average and most savers will experience returns far below that level. For context, the 3. 6% figure means £3. 60 in prizes per year for every £100 invested.
Odds, payouts and what savers saw in 2025
NS&I paid out over £4. 95 billion across 71. 7 million prizes in 2025. In December 2025 the ERNIE machine generated over 6. 1 million prizes worth £403. 8 million. The scheme recently passed £40 billion in prizes drawn since its launch in November 1956. 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. "
How this compares with regular savings and tax rules
Premium Bonds do not pay interest; each £1 bond is entered in a monthly draw with prizes from £25 to £1 million and winnings are tax-free. Individuals can hold up to £50, 000 in Premium Bonds, including children under 16, and new purchases must be held for one full calendar month before being eligible for the monthly draw. Most people with typical luck will not achieve the headline prize rate (3. 6% now, 3. 3% from April), even with the £50, 000 maximum held. A partially truncated example in the provided context about investing £1, 000 and waiting "around 3, 500... " is unclear in the provided context.
By contrast, a top standard easy-access rate of 4. 5% would pay £45 a year on £1, 000, and the top easy-access cash ISA rate is currently 4. 4%, which is tax-free and offers a guaranteed return that was higher than the then-current 3. 6% prize rate. Personal savings allowances mean basic-rate taxpayers pay no tax on the first £1, 000 of interest, higher-rate taxpayers pay no tax on the first £500, and top 45% taxpayers pay tax on all interest. For larger sums of cash, and for savers who have already used their £20, 000 ISA allowance, Premium Bonds may remain an option if the tax-free, prize-driven return and randomness are acceptable.
What happens next
The new prize-fund rate of 3. 3% and the extended odds of 23, 000-to-1 take effect from the April 2026 draw; that draw is the next confirmed event for the scheme and will implement the revised prize allocations and odds laid out above.
