Sammie Ellard-King
I’m Sammie, a money expert and business owner passionate about helping you take control of your wallet. My mission with Up the Gains is to create a safe space to help improve your finances, cut your costs and make you feel good while doing it.
NS&I will cut its Premium Bond prize-fund rate to 3.3% (from 3.6%) for the April draw and beyond.
The odds of any single bond winning a prize are also dropping slightly, from 1 in 22,000 to 1 in 23,000.
This latest cut follows a series of reductions last year, which took the prize-fund rate from 4% in January to 3.6% by August.
How Does This Compare to Regular Savings?
For most savers with average luck, accounts that pay interest will now be even more likely to beat Premium Bonds.
Today’s top easy-access savings rate is 4.5%. That means you’d get £45 in interest a year for every £1,000 saved – guaranteed.
The top easy-access cash ISA rate is currently 4.4% – slightly lower than the standard non-ISA rate, but tax-free and offering a guaranteed return that’s higher than the current Premium Bond prize rate.
More news:
Why Most People Get Less Than 3.3%
It’s important to understand that most people with typical luck won’t actually get a return of 3.3%, even with the maximum £50,000 invested.
The 3.3% prize-fund rate means that for every £100 invested in Premium Bonds, £3.30 is paid out every year in prizes.
But although the prizes include two £1 million payouts and other big prizes, many win far less – or nothing at all.
Many people think: “I’m likely to get the prize rate (or thereabouts) – and there’s a small chance of winning a million.”
This isn’t correct.
You’re actually likely to get quite a lot less than the headline prize rate, and there’s a negligible chance of winning a million.
How Many Prizes Are There?
Here’s how the number of prizes awarded is estimated to change from April 2026:
£1 million prizes: 2 (no change)
£100,000 prizes: 71 (down from 78)
£50,000 prizes: 143 (down from 154)
£25,000 prizes: 284 (down from 311)
£10,000 prizes: 712 (down from 777)
£5,000 prizes: 1,424 (down from 1,553)
£1,000 prizes: 15,035 (down from 16,322)
£500 prizes: 45,105 (down from 48,966)
£100 prizes: 1,537,125 (down from 1,735,948)
£50 prizes: 1,537,125 (down from 1,735,948)
£25 prizes: 2,806,003 (up from 2,643,007)
Total prizes: 5,943,029 (down from 6,183,066)
So there will be fewer prizes overall, and fewer of the bigger prizes.
What About Tax?
Premium Bond prizes are tax-free. But so are cash ISAs.
With normal savings accounts, you get a personal savings allowance (PSA):
- Basic-rate taxpayers don’t pay tax on the first £1,000 a year of interest
- Higher-rate taxpayers don’t pay tax on the first £500 a year of interest
- Top-rate taxpayers pay tax on all interest
With today’s top standard (non-ISA) easy-access rate of 4.5%, it takes just over £22,222 in savings for basic-rate taxpayers to exceed the allowance and start paying tax (and just over £11,111 for higher-rate taxpayers).
When Are Premium Bonds Still Worth It?
Premium Bonds might make sense if:
- You have large savings and have maxed out your £20,000 ISA allowance – and you earn enough interest to exceed your personal savings allowance
- You accept the random nature of the returns – you understand you might win nothing
- You enjoy the thrill of the monthly draw – you’re treating it partly as entertainment
For everyone else, cash ISAs are likely the better choice.
They offer guaranteed returns that beat the Premium Bond prize rate, and they’re tax-free.
What Should You Do?
If you’re keeping money in Premium Bonds hoping for steady, reliable returns, you’re probably better off switching to a top easy-access savings account or cash ISA.
But if you know and accept that you might win nothing, and you like the chance (however small) of winning big prizes, then Premium Bonds aren’t a bad option – just don’t expect to get 3.3% returns.
Check regularly updated savings guides for the latest top rates on easy-access accounts and cash ISAs.
Right now, you can get 4.5% guaranteed – significantly better than gambling on Premium Bonds.
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Disclaimer: Content on this page is for informational purposes and does not constitute financial advice. Always do your own research before making a financially related decision.
