Ns&i Premium Bonds Rate Change Shaves Prize Fund to 3.3% and Lengthens Odds
The ns&i premium bonds rate change will cut the annual prize-fund rate from 3. 6% to 3. 3% for the April 2026 draw and lengthen the odds of a single £1 bond winning a prize from 1 in 22, 000 to 1 in 23, 000, a move that will reduce the number of higher-value prizes on offer.
Ns&i Premium Bonds Rate Change: what NS&I will cut
NS&I, the Treasury-backed bank, said the prize-fund rate will drop to 3. 3% from April 2026 and that the per-bond odds will move to 23, 000 to 1 from the current 22, 000 to 1. The prize-fund rate was last changed in August 2025, and the odds were last adjusted in December 2024.
Fewer big prizes in the April draw
The shift reduces the number of top-tier prizes. NS&I estimates the number of £100, 000 prizes will fall from 78 in the most recent draw to 71 in April; £50, 000 prizes will fall to 143 from 154; and £25, 000 prizes will fall to 285 compared with 311 in February.
How Premium Bonds work and who might still benefit
Instead of paying interest, Premium Bonds enter each £1 bond into a monthly draw funded by an annual prize-fund rate; prizes range from £25 to £1m and winnings are tax-free. Individuals can hold up to £50, 000 in Premium Bonds, including for children under the age of 16. New purchases must be held for one full calendar month before they are eligible for the monthly prize draw.
NS&I said Premium Bonds remain the UK’s most popular savings account and that the scheme recently passed £40bn 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. "
Recent payouts, ERNIE and the changing prize-rate picture
In 2025, NS&I paid out over £4. 95bn across 71. 7 million prizes, one of the biggest payout years on record. In December 2025 the draw machine ERNIE (Electronic Random Number Indicator Equipment) generated over 6. 1 million prizes worth £403. 8m. The prize-rate benchmark has moved frequently: it has been 3. 60% since August 2025 after peaking at 4. 65% in late 2023, and one account of recent reductions said the prize-fund rate fell from 4% in January to 3. 6% by August last year.
Tax, alternatives and what the numbers mean for savers
The prize rate is variable and NS&I said it can shift with the wider savings market or the Bank of England base rate; it also stressed that 3. 3% is an average and that most savers will see returns far below that level. Premium Bond prizes are tax-free. By contrast, normal savings interest is taxable as income but covered by the personal savings allowance: basic-rate taxpayers pay no tax on the first £1, 000 of interest per year, higher-rate taxpayers on the first £500, and top-rate taxpayers pay tax on all interest.
With a top standard (non-ISA) easy-access rate of 4. 5%, it takes just over £22, 222 in savings for basic-rate taxpayers to exceed their allowance and just over £11, 111 for higher-rate taxpayers. The top easy-access cash ISA rate is currently 4. 4% and is tax-free; that guaranteed return is higher than the current Premium Bonds prize-fund rate of 3. 6% before the April cut. If a saver has larger cash holdings, has used their £20, 000-a-year ISA allowance and is earning enough interest to exceed the PSA, NS&I suggested Premium Bonds could be a reasonable option for those who accept the randomness of prizes.
One fragment in the provided material about how long a £1, 000 holding might take to return a specific outcome was cut off and is unclear in the provided context.
NS&I's change takes effect for the April 2026 draw; recovery of prize counts and the drawing schedule will follow NS&I's published draws and monthly ERNIE runs.
