Ns&i cuts Premium Bonds prize-fund rate to 3.3% for April 2026 draw — are they still worth it?
ns&i will cut the Premium Bonds prize-fund rate to 3. 3% (from 3. 6%) for the April 2026 draw and beyond, and will lengthen the odds of a single bond winning from 1 in 22, 000 to 1 in 23, 000. The move reduces headline returns, adjusts prize volumes for the April draw and reinforces a shift already underway in the product’s payout profile — a change that matters to savers weighing guaranteed interest against tax-free prize potential.
Ns&i: what’s changing for the April 2026 draw
The annual prize-fund rate will drop from 3. 6% to 3. 3% for the April 2026 draw and the odds of any single bond winning a prize will lengthen from 1 in 22, 000 to 1 in 23, 000. The provider framed the adjustment as reflecting changes in the wider savings market and as an effort to balance the interests of savers, taxpayers and the wider financial services sector, while urging savers who are unsure to consult a financial adviser.
Prize mix and totals: fewer prizes, same jackpot sizes
The April draw is expected to award two £1 million jackpots, 71 prizes of £100, 000 and 143 prizes of £50, 000. The largest share of awards will remain at the lower end: around 2. 8 million £25 prizes and about 1. 5 million £50 prizes and 1. 5 million £100 prizes. Overall, around £375 million in tax-free prizes are expected to be paid out in April across nearly 6 million prizes.
The total number of prizes is expected to fall slightly to around 5. 9 million in April from 6. 2 million in February, reflecting both the lower prize-fund rate and the longer odds.
History of recent cuts and odds changes
The prize-fund rate has been scaled back over a series of changes: reductions last year moved the annual rate from 4% in January to 3. 6% by August, and the prize fund was last adjusted in August 2025. The odds were previously lengthened in December 2024; the current adjustment continues that trend.
What the numbers mean for ordinary savers
Most savers with typical luck are unlikely to achieve the headline prize-fund rate in practice, even with the maximum permitted holding. The random nature of prize draws means many people saving the same sums will win nothing in a given period; the chance of a very large jackpot is negligible for most individuals. By contrast, interest-paying accounts offer a guaranteed return: with today’s top standard easy-access rate of 4. 5%, a saver would earn £45 a year for every £1, 000 held at that rate, providing certainty that Premium Bonds do not.
Tax treatment and when Premium Bonds might still make sense
Premium Bond prizes are tax-free. By contrast, interest on normal savings is taxable but there is a personal savings allowance (PSA) that shields some interest from tax: basic-rate taxpayers pay no tax on the first £1, 000 of interest each year, higher-rate taxpayers pay no tax on the first £500, and top-rate taxpayers pay tax on all interest.
With a 4. 5% easy-access interest rate, it takes just over £22, 222 in savings for a basic-rate taxpayer to exceed the PSA and start paying tax on interest, and just over £11, 111 for a higher-rate taxpayer. For savers with larger cash balances who have already used their £20, 000-a-year ISA allowance and who expect to earn interest above their PSA, Premium Bonds can be an attractive, tax-free alternative—provided they accept an unpredictable return. For many other savers, cash ISAs remain likely to be the better choice: the top easy-access cash ISA rate is currently 4. 4%, offering a guaranteed, tax-free return that compares favourably with the headline Premium Bonds prize-fund rate.
Product position and what to watch next
Premium Bonds continue to offer capital security backed by the Treasury, instant access to funds and monthly tax-free prizes ranging from £25 to £1 million. The product remains popular, with more than £40 billion in prizes drawn since its launch in November 1956. The recent reduction brings the prize-fund rate more in line with wider downward movement in easy-access savings rates, and the practical effect for savers will be slightly fewer prizes and longer odds for any individual bond.
Recent updates indicate the changes described here; details may evolve and savers who are unsure about their choices are advised to seek professional financial advice.
