Premium Bond prize fund rate slashed again by NS&I – should you ditch yours?

By HELEN KIRRANE

Updated: 10:33 BST, 24 June 2025

The Premium Bonds prize fund rate will be slashed from the August 2025 draw, National Savings and Investments has announced.

The prize fund rate, which represents the average return a Premium Bonds saver would receive throughout the year, is being cut to 3.6 per cent from 3.8 per cent.

The odds remain at 22,000 to 1, but it means there will be four fewer £100,000 prizes from August, from 79 to 75. 

Meanwhile, there will be 151 £50,000 prizes, down from 159 currently. There will be 15 fewer £25,000 prizes and 38 fewer £10,000 ones. The two £1million jackpot prizes remain. 

NS&I says the rate cut reflects ‘the changing landscape for savings.’ 

Last week, the Bank of England held the base rate at 4.25 per cent. 

Premium Bonds hit a high of 4.65 per cent in September 2023 and have been steadily falling since. In April, NS&I cut the prize fund rate to 3.8 per cent.

The August move will be the fifth cut to the prize fund rate since March 2024.

Andrew Westhead, NS&I retail director, said: ‘This adjustment to the Premium Bonds prize fund rate – the first in four months – reflects the changing landscape for savings.’ 

‘Premium Bonds maintain their unique appeal by offering complete security backed by HM Treasury, the flexibility to withdraw easily, and the excitement of potentially winning a tax-free prize each month. 

‘The August draw is expected to deliver more than 6million tax-free prizes worth over £396million.

‘By making this adjustment now, we’re able to continue to balance the interests of savers, taxpayers and the stability of the broader financial services sector.’

Currently, the best buy easy-access accounts pay up to 4.75 per cent.

However, the major attraction of Premium Bonds is receiving tax-free prizes, and the lure of winning a life-changing sum of money, while being able to withdraw money fairly easily.

You can check out the best buy easy-access savings tables to see how they compare.

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Premium Bond prize fund rate slashed again by NS&I – should you ditch yours?

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