Premium Bond holders across the United Kingdom will encounter diminished opportunities to secure substantial prizes starting in April, following a significant update from National Savings and Investments. The government-backed savings provider has confirmed a reduction in the Premium Bonds prize fund rate, alongside an extension of the odds against winning.
Key Changes to Premium Bonds from April 2026
The Premium Bonds prize fund rate will decline from 3.60 per cent to 3.30 per cent, effective from April. Concurrently, the odds of winning any prize will extend from 22,000 to one to 23,000 to one. These adjustments reflect broader shifts within the savings market and NS&I's obligation to balance the interests of savers, taxpayers, and the financial services sector.
Impact on Prize Distribution
The total number of Premium Bonds prizes in April is projected to fall to approximately 5,943,029, down from 6,183,066 in February. While the number of £1 million prizes is expected to remain steady at two, reductions are anticipated across several higher-value categories.
- The projected number of £100,000 prizes will decrease to 71 in April, from 78 in February.
- £50,000 prizes will drop from 154 to an estimated 143.
- Prizes worth £25,000 will decline from 311 to approximately 284.
- £10,000 prizes will reduce from 777 to 712.
Conversely, the number of £25 prizes will increase, with around 2,806,003 anticipated for April, compared to 2,643,007 in February.
NS&I's Strategic Position
Andrew Westhead, NS&I retail director, emphasized that these changes are necessary to align with market conditions. "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," he stated. "Premium Bonds continue to be the most popular UK savings account."
NS&I, operating under Treasury backing, must achieve annual targets for net finance raised on behalf of the government. The organization recently surpassed £40 billion in prizes drawn since its inception, with the April draw expected to feature close to six million tax-free prizes valued at approximately £375 million.
Historical Context and Unique Appeal
Launched in November 1956, Premium Bonds have maintained their unique appeal by offering 100 per cent security, flexible withdrawal options, and the monthly excitement of potentially winning a tax-free prize. Unlike traditional savings accounts that provide interest payments, Premium Bonds distribute an annual prize fund rate that finances the monthly draw.
Each £1 bond purchased enters the monthly prize draw, with rewards ranging from £25 to £1 million. Individuals, including those under 16 years of age, can hold up to £50,000 in Premium Bonds. New purchases must be held for one complete calendar month before becoming eligible for the draw.
Operational Details and Market Environment
NS&I confirmed that nine out of ten prizes are transferred directly into the holder's designated bank account or automatically reinvested into Premium Bonds for subsequent draws. This streamlined process enhances convenience for millions of savers.
The adjustments come amid a challenging environment for savers, following the Bank of England's base rate cut in December and anticipated further reductions. These broader economic factors influence NS&I's pricing strategy and prize fund allocations.
Despite the reduced prize fund rate and extended odds, Premium Bonds remain a cornerstone of UK savings, combining security with the prospect of tax-free rewards. Savers are advised to review their holdings and consider these changes when planning their financial strategies for the coming months.
