Martin Lewis’ MoneySavingExpert.com (MSE) team has discussed the continued value of Premium Bonds following a reduction in NS&I’s prize fund rate.
Premium Bonds offer a unique savings opportunity where instead of earning a fixed interest rate, participants are entered into a monthly prize draw.
The prizes range from £25 to £1 million, but winning every month is not guaranteed, with more smaller prizes than larger ones.
NS&I recently confirmed a decrease in the Premium Bonds prize fund rate from 3.6% to 3.3% starting from the April 2026 draw.
The prize fund rate serves as the closest equivalent to an interest rate for Premium Bonds, with the odds of winning a prize per bond shifting from 1 in 22,000 to 1 in 23,000.
According to Martin Lewis’ MSE team, the latest rate cut makes it easier to find better returns elsewhere than with Premium Bonds, especially for individuals with average luck who may not achieve a return of 3.6% or 3.3% even with the maximum £50,000 investment.
Savings accounts offering interest are now more likely to outperform Premium Bonds, providing a guaranteed return that offers greater certainty compared to the chance-based nature of Premium Bonds.
Most savers are projected to receive less than the prize fund rate and have a slim chance of winning the top £1 million prize, prompting MSE to suggest that investing in Premium Bonds may not be the most lucrative option for many individuals.