Premium Bonds Rate Cut to 3.30% From April 2026 — Odds Lengthen Too
NS&I has announced a double blow for Premium Bonds holders: the prize fund rate is being cut from 3.60% to 3.30%, and the odds of winning are lengthening from 22,000 to 1 to 23,000 to 1 — both effective from the April 2026 draw. Here's exactly what it means for your returns, how the prize breakdown changes, and whether Premium Bonds are still worth holding.
What's Changing
This is the first time NS&I has changed both the prize fund rate and the odds simultaneously since December 2024. The rate has been at 3.60% since August 2025, and the odds at 22,000 to 1 since December 2024.
NS&I Retail Director Andrew Westhead said the changes "reflect changes in the wider savings market" and ensure NS&I continues to "balance the interests of savers, taxpayers and the wider financial services sector."
In practical terms, both changes work against savers. A lower prize fund rate means less total money goes into the monthly prize pot. Longer odds mean each individual £1 bond is less likely to be drawn as a winner. Together, they mean holders will win less often and the average value of winnings across the population will fall.
The New Prize Breakdown: April 2026 vs February 2026
NS&I has published estimated prize counts for the April draw. The picture is broadly fewer prizes at almost every level, with one exception — the number of £25 prizes actually increases.
| Prize Value | Feb 2026 | Apr 2026 (est.) | Change |
|---|---|---|---|
| £1,000,000 | 2 | 2 | — |
| £100,000 | 78 | 71 | -9.0% |
| £50,000 | 154 | 143 | -7.1% |
| £25,000 | 311 | 284 | -8.7% |
| £10,000 | 777 | 712 | -8.4% |
| £5,000 | 1,553 | 1,424 | -8.3% |
| £1,000 | 16,322 | 15,035 | -7.9% |
| £500 | 48,966 | 45,105 | -7.9% |
| £100 | 1,735,948 | 1,537,125 | -11.5% |
| £50 | 1,735,948 | 1,537,125 | -11.5% |
| £25 | 2,643,007 | 2,806,003 | +6.2% |
| Total | 6,183,066 | 5,943,029 | -3.9% |
The £100 and £50 tiers take the biggest proportional hit, both dropping around 11.5%. Meanwhile, the increase in £25 prizes reflects the standard NS&I band allocation rules — the lower band (80% of the prize fund) gets adjusted last, and the £25 tier acts as the balancing item. More £25 prizes, but far fewer meaningful ones.
📊 What This Actually Means
Around 240,000 fewer prizes will be awarded each month. The total prize fund drops by roughly £33 million per month — from ~£408m to ~£375m. That's approximately £396 million less distributed to Premium Bonds holders per year compared to the current rate.
The Rate Cut Timeline: From 4.65% to 3.30%
This is now the sixth cut to the prize fund rate since it peaked at 4.65% in September 2023. Here's how it has fallen:
| Effective Date | Prize Fund Rate | Odds |
|---|---|---|
| September 2023 | 4.65% | 1 in 21,000 |
| December 2024 | 4.15% | 1 in 22,000 |
| January 2025 | 4.00% | 1 in 22,000 |
| April 2025 | 3.80% | 1 in 22,000 |
| August 2025 | 3.60% | 1 in 22,000 |
| April 2026 | 3.30% | 1 in 23,000 |
The rate has now dropped by 1.35 percentage points — almost 30% — from its peak. The odds have gone from 21,000 to 1 to 23,000 to 1 in that time, a roughly 10% reduction in your chance of winning per bond.
Median Returns: What You'll Actually Win
Here's the part most coverage misses. The 3.30% prize fund rate is a mean average — it's skewed upward by the two £1 million jackpots and other large prizes that the vast majority of holders will never win. The median return — what a typical holder actually receives — is always significantly lower.
🎯 Estimated Median Returns at 3.30% / 23,000:1
| Holding | Old Median (3.60%) | New Median (3.30% est.) | Change |
|---|---|---|---|
| £50,000 | ~£1,550 (3.10%) | ~£1,400 (2.80%) | -£150/yr |
| £10,000 | ~£275 (2.75%) | ~£225 (2.25%) | -£50/yr |
| £5,000 | ~£100 (2.00%) | ~£75 (1.50%) | -£25/yr |
| £1,000 | £0 (0%) | £0 (0%) | — |
Estimates based on Monte Carlo simulation. Exact medians will be updated on our calculator once the April rate is live.
The key insight: at maximum holding (£50,000), the gap between the advertised 3.30% mean rate and the actual median return of ~2.80% is about half a percentage point. That gap is entirely explained by jackpot skew. For smaller holdings, the gap is much wider — someone with £1,000 has a median return of zero.
Are Premium Bonds Still Worth It?
The answer depends on your tax situation, and the rate cut makes this comparison tighter.
For higher-rate taxpayers (40%)
At 3.30% tax-free, Premium Bonds are equivalent to a gross savings rate of 5.50% for a 40% taxpayer. With the best easy access savings accounts currently around 4.00%, Premium Bonds still win comfortably for higher-rate taxpayers who have used their ISA and Personal Savings Allowance.
For additional-rate taxpayers (45%)
The tax-free equivalent rises to 6.00%. Premium Bonds remain extremely attractive at this level — you simply cannot find that rate elsewhere on an easy-access, government-backed product.
For basic-rate taxpayers (20%)
At 3.30% tax-free, the gross equivalent is 4.13%. If you still have ISA allowance remaining, Cash ISAs paying 4.30%+ beat Premium Bonds on a guaranteed basis. If you have remaining Personal Savings Allowance (£1,000/year), you can earn interest tax-free anyway — making the Premium Bonds tax advantage irrelevant.
⚖️ Quick Comparison at 3.30%
| Tax Band | PB Gross Equivalent | Best Easy Access | Verdict |
|---|---|---|---|
| Basic (20%) | 4.13% | ~4.00% | Close call |
| Higher (40%) | 5.50% | ~4.00% | PBs win |
| Additional (45%) | 6.00% | ~4.00% | PBs win easily |
Use our comparison tool for exact calculations with your savings rate and tax band. Will be updated with the new 3.30% rate shortly.
Why Is NS&I Cutting Rates?
The Bank of England cut the base rate to 3.75% in December 2025, and there's widespread expectation of further cuts in 2026. NS&I, as a government-backed savings provider, has a financing target — it needs to attract a certain level of deposits without offering rates so competitive that they distort the wider savings market.
This follows NS&I's February 2026 cuts to Direct Saver (down to 3.05%) and Income Bonds (also 3.05%). Premium Bonds held out longest, but the adjustment was inevitable given the wider downward trend.
What You Should Do
There's no rush — the March draw still uses the current 3.60% rate. But here's a practical checklist:
✅ Action Checklist
- Check your ISA usage. If you haven't used your £20,000 ISA allowance for 2025/26, consider whether Cash ISAs at 4.30%+ are better for some of your savings. Tax year ends 5 April 2026.
- Review your tax position. Higher and additional-rate taxpayers should likely keep Premium Bonds — the tax-free advantage still outweighs the rate cut. Use our comparison tool.
- Check your bonds. Make sure you haven't got unclaimed prizes sitting there. Use our prize checker — it works even when the NS&I website is down.
- Don't panic-sell. Premium Bonds remain 100% government-backed with instant access. The rate cut is a factor in your decision, not an emergency.
- Run the numbers. Our calculator will be updated with the new 3.30% rate and 23,000:1 odds shortly so you can see your realistic expected returns.
When Will Rates Fall Again?
If the Bank of England continues cutting the base rate through 2026 — which markets currently expect — further Premium Bonds rate reductions are likely. The rate was 4.65% less than three years ago. Savers who remember the 1.00% low of December 2020 know how quickly things can change.
We'll update all calculators and comparison tools with the new 3.30% rate and 23,000:1 odds once they take effect. In the meantime, the March draw is your last month at the current rate.
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Frequently Asked Questions
When does the new rate take effect?
The new 3.30% prize fund rate and 23,000 to 1 odds take effect from the April 2026 draw, which takes place on Wednesday 1 April 2026. The March draw (Monday 2 March) still uses the current 3.60% rate and 22,000 to 1 odds.
Do I need to do anything?
No action is required. The rate change applies automatically to all existing Premium Bonds. You don't need to contact NS&I or make any changes to your holdings.
Are the £1 million jackpots staying?
Yes. NS&I confirmed there will still be two £1 million jackpot prizes every month. However, the odds of winning one have effectively increased due to the change from 22,000 to 23,000 to 1.
Should I cash in my Premium Bonds?
It depends on your circumstances. Higher-rate taxpayers should likely keep them. Basic-rate taxpayers with unused ISA allowance may do better elsewhere. Use our comparison tool to check. Remember, Premium Bonds are easy-access and 100% government-backed — there's no penalty for withdrawing later if rates drop further.
How does this compare to the Bank of England base rate?
The BoE base rate is currently 3.75% (since December 2025). The new Premium Bonds rate of 3.30% sits below the base rate, which is unusual historically. However, the tax-free nature of Premium Bonds means the effective comparison depends on your tax band.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Premium Bonds returns are variable and past performance doesn't guarantee future results. Rates and tax rules are subject to change. Consider your personal circumstances and consult a financial advisor for personalised guidance.