Ns&i to Cut Premium Bond Prize Rate to 3.3% from April, Odds of a Win Worsen
ns&i will reduce the Premium Bond annual prize-fund rate from 3. 6% to 3. 3% for the April draw, a move that will slightly worsen the odds of a win from 1 in 22, 000 to 1 in 23, 000. The change matters now because it reshapes the mix and number of prizes in a draw expected to hand out close to six million tax-free prizes worth about £375m.
Ns&i prize-fund rate and timeline
The prize-fund rate is the benchmark used to indicate the average return on Premium Bonds and will fall to 3. 3% for the April draw and subsequent draws. This cut follows a series of reductions last year: the rate moved from 4% in January to 3. 6% by August and then remained at 3. 6% through December 2024 before this latest reduction.
Odds of a win and April draw prize table
The odds attached to each £1 bond number will stretch modestly: the chance of any single bond winning will change from 22, 000-1 to 23, 000-1. NS&I expects the April draw to deliver nearly six million prizes totaling around £375m. The Whitehall agency has trimmed the number of higher-value payouts and increased the count of the smallest prizes: the number of £25 prizes will rise from about 2. 6 million to just over 2. 8 million, while the number of £100, 000 prizes is estimated to fall from 78 to 71 and £25, 000 payouts are set to drop from 311 to 284.
£1m jackpot winners in March held the £50, 000 maximum
Both of the £1 million jackpot winners in March each held the maximum allowable £50, 000 in Premium Bonds. Premium Bond prizes range from £25 to £1 million, but the distribution of wins skews heavily toward the smallest prizes; most bondholders with typical luck will receive significantly less than the headline prize-fund rate even at the £50, 000 holding cap.
Tax position, alternatives and saver impacts
Premium Bond prizes are tax-free, which is a particular advantage for savers who have exhausted their ISA allowances or who would otherwise breach the personal savings allowance. Basic-rate taxpayers receive a personal savings allowance that shields the first £1, 000 of interest; higher-rate taxpayers have a £500 allowance; top-rate taxpayers pay tax on all interest. As an example, a £50, 000 holding returning the equivalent of 3. 3% would yield £1, 650 tax-free, while an equivalent interest-bearing return would leave a higher-rate taxpayer with a tax bill of about £743 on that interest.
By contrast, guaranteed savings rates remain higher in many corners of the market: the current top easy-access standard rate is 4. 5%, equivalent to £45 in interest per year for every £1, 000 saved, and the best easy-access cash ISA rates are around 4. 4%. At a 4. 5% interest rate, a basic-rate taxpayer would need just over £22, 222 in savings to exceed the personal savings allowance; a higher-rate taxpayer would need just over £11, 111. Because interest on ordinary accounts is paid predictably, many savers with average luck are likely to see a better outcome in interest-paying accounts than from Premium Bonds.
