Martin Lewis’ MoneySavingExpert.com team has discussed the continued value of Premium Bonds following NS&I’s announcement of a reduction in its prize fund rate. Premium Bonds offer a unique savings opportunity where instead of receiving a fixed interest rate, participants are entered into a monthly prize draw. Prizes range from £25 to £1 million, but winning is not guaranteed, and smaller prizes are more common than larger ones.
Recently, NS&I confirmed a decrease in the Premium Bonds prize fund rate from 3.6% to 3.3% starting from the April 2026 draw. The odds of winning a prize with a single bond have also shifted from 1 in 22,000 to 1 in 23,000. The MoneySavingExpert.com team pointed out that with the latest rate cut, it may be easier to find better returns elsewhere than with Premium Bonds.
According to the team, individuals with average luck are unlikely to achieve a return of 3.6% or 3.3%, even with the maximum £50,000 investment. They suggested that accounts offering interest are now more likely to outperform Premium Bonds. Interest from savings accounts provides a guaranteed return, offering more predictability compared to the uncertainty of winning with Premium Bonds.
MoneySavingExpert.com emphasized that most people are expected to receive returns lower than the prize fund rate, with minimal chances of winning the top £1 million prize. Despite this, they noted that investing in Premium Bonds could still be a viable option for those who understand and accept the lower odds of winning.