Millions of Premium Bonds savers across the UK are set for a disappointment as NS&I (National Savings and Investments) has confirmed a cut to the prize fund interest rate. The move, which comes into effect from the June 2024 draw, will see the odds of winning a prize lengthen.
The official rate governing the prize pool will be reduced from 4.40% to 4.15%. This crucial change directly impacts how the total monthly prize fund is distributed, making it statistically harder for each individual Bond number to secure a win.
What This Means for Your Bonds
For the average saver, this adjustment translates to a tangible decrease in their chances. The odds of each £1 Bond number winning a prize will worsen, moving from 21,000 to 1 down to 22,000 to 1. While the total number of prizes remains substantial, the slice of the pie for each holder gets smaller.
This decision is part of NS&I's broader strategy to balance the interests of its savers with its requirement to raise cost-effective financing for the government. The organisation must navigate the broader interest rate environment set by the Bank of England.
A Silver Lining? Prize Breakdown Changes
It's not all bad news. NS&I has announced a slight reshuffling of the prize structure. While the number of higher-tier prizes will see a reduction, there will be an increase in the number of smaller £50 and £100 prizes awarded each month.
This means that while jackpot wins might be slightly less frequent, there could be more opportunities for savers to land a smaller, yet welcome, cash prize. The total value of prizes distributed is expected to fall in line with the new, lower prize fund rate.
NS&I has stated that all existing Premium Bonds holders will be communicated with directly regarding these changes. Savers are encouraged to review their holdings and consider how this shift aligns with their personal savings goals.
