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NS&I Premium Bond cuts looming, says expert, as April sees fewer big winners

Between October and December 2024, Treasury-backed NS&I experienced a net inflow of £5.5 billion as part of its net financing target responsibilities for the financial year 2024/25.
Due to a massive third quarter, NS&I, which aims to balance the interests of savers and taxpayers, is implementing interest rate reductions across its products, responding to recent Bank of England base rate cuts.
NS&I has raised £8.9 billion in the first three-quarters of the 2024/25 financial year and is now expected to raise £10.5 billion, which is within its target of £9 billion with a margin of plus or minus £4 billion.
As the Premium Bond prize winning fund rate is being slashed from 4% to 3.8% in April 2025, resulting in an approximate £20 million cut, the estimated number of higher-value prizes will decrease, including £100,000 prizes falling from 82 in February to 78 in April.
Hargreaves Lansdown's head of personal finance, Sarah Coles, suggests that further Premium Bond cuts are likely even with the increased £12 billion net financing target for 2025/26, as savings rates are expected to fall, potentially influencing prize rates.

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Premium bond cuts looming in blow to NS&I savers, expert warns

Premium bond holders should prepare for more cuts to the prize fund rate this year, an expert has warned.The rate – which is the closest thing premium bonds have to an interest rate – is being reduced from 4 per cent to 3.8 per cent from the April 2025 draw.This marks the second rate cut this year and reflects the broader trend of declining interest rates across the savings market.Sarah Coles, head of personal finance at Hargreaves Lansdown, sai…

3 days ago·London, United Kingdom

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