Ns&i cuts Premium Bonds prize fund to 3.3% and lengthens odds for April draw
ns&i will reduce the Premium Bonds annual prize-fund rate from 3. 6% to 3. 3% for the April 2026 draw and will lengthen the odds of a single bond winning from 1 in 22, 000 to 1 in 23, 000. The change trims expected payouts and further narrows the gap between prize-based returns and guaranteed savings rates, prompting savers to reassess where they hold cash.
Ns&i prize fund cut to 3. 3%
The state-owned National Savings & Investments is lowering the headline annual prize-fund rate to 3. 3% from 3. 6%, taking effect with the April 2026 draw. The prize-fund rate is the closest equivalent Premium Bonds have to an interest rate, and it has been reduced in stages over the past year: the rate was 4% in January before a series of reductions that brought it to 3. 6% by August 2025, with the last formal change recorded in August 2025.
Odds lengthen to 23, 000 to 1 for April draw
The chance of any single £1 bond winning in the monthly draw will move from 1 in 22, 000 to 1 in 23, 000, after having been at the 1-in-22, 000 level since December 2024. That longer odds are part of the mechanism that reduces the total number of prizes paid when the prize-fund rate is lowered.
April draw to award two £1m jackpots and around £375m in prizes
The structure for April will include two £1 million jackpots, 71 prizes of £100, 000 and 143 prizes of £50, 000. The bulk of awards will remain at the lower end: around 2. 8 million £25 prizes and about 1. 5 million each of £50 and £100 prizes. Overall prize counts are expected to fall slightly to around 5. 9 million in April from 6. 2 million in February, and roughly £375 million in tax-free prizes is expected to be paid out in April.
How returns stack up against standard savings and cash ISAs
For many savers the change makes traditional interest-bearing accounts relatively more attractive. The top easy-access non-ISA rate currently stands at 4. 5%, which equates to £45 of interest per year for every £1, 000 saved, while the top easy-access cash ISA rate is 4. 4% and offers a guaranteed, tax-free return. By contrast, the headline Premium Bonds prize-fund rate of 3. 3% is an average benchmark that most typical investors will not receive; even with the £50, 000 holding limit, many people with normal luck are likely to earn considerably less than the published rate.
Tax treatment also plays into decisions. Premium Bond prizes are tax-free. With interest-bearing savings, savers benefit from a personal savings allowance: basic-rate taxpayers do not pay tax on the first £1, 000 of interest a year, higher-rate taxpayers have a £500 allowance, and top-rate taxpayers pay tax on all interest. At a 4. 5% interest rate, a basic-rate taxpayer would need just over £22, 222 in savings to start paying tax on interest, and a higher-rate taxpayer would need just over £11, 111.
NS&I scale, safeguards and retail rationale
NS&I emphasises the product's scale and guarantees: Premium Bonds continue to offer capital security backed by HM Treasury, instant access to funds and the possibility of monthly tax-free prizes ranging from £25 to £1 million. The scheme has distributed more than £40 billion in prizes since launching in November 1956 and remains the country's most popular savings product by participation.
Andrew Westhead, NS&I retail director, said the change "reflects changes in the wider savings market and ensures we continue to balance the interests of savers, taxpayers and the wider financial services sector. " What makes this notable is that the adjustment is explicitly linked to moves elsewhere in the savings market where easy-access accounts have been repricing downwards.
What this means for savers
The reduction and longer odds compress the expected prize pool and marginally reduce the probability of winning, reinforcing the point that many savers who prioritise a guaranteed return will now find ordinary interest-paying accounts or cash ISAs more straightforward. For people who have fully used their £20, 000 a year ISA allowance and who prioritize tax-free outcomes on larger cash deposits, the tax-free nature of Premium Bond prizes may still make them a suitable option—provided they accept the randomness of returns and the negligible probability of a large jackpot.
