NS&I is cutting the Premium Bonds prize fund rate to 3.6% effective in August 2025, down from its current 3.8%.
The August draw is expected to total approximately £396.7m. This is nearly £20m lower when compared with June, although the number of prizes will rise slightly to over 6 million.
The odds of winning will remain unchanged at 22,000 to 1 for each £1 bond.
Greig Bingham, head of financial modelling at Broadstone, said: “The odds have shifted towards a greater likelihood of winning at the smaller end of the scale meaning the average effective return will dip slightly. For example, over 80% of the 6 million prizes expected in August will be for £25, £50 or £100. This means the average effective return will dip slightly.
“This will be disappointing for savers and another reminder that, as interest rates fall, people will need to work harder to put their cash to work and earn attractive returns.”
Number and value of Premium Bonds prizes
|
Value of prizes |
Number and total value of prizes in June 2025 |
Number and total value of prizes in August 2025 (estimate) |
|
£1,000,000 |
2 |
2 |
|
£100,000 |
79 |
75 |
|
£50,000 |
159 |
151 |
|
£25,000 |
317 |
302 |
|
£10,000 |
792 |
754 |
|
£5,000 |
1,585 |
1,507 |
|
£1,000 |
16,649 |
15,869 |
|
£500 |
49,947 |
47,607 |
|
£100 |
1,853,552 |
1,687,680 |
|
£50 |
1,853,552 |
1,687,680 |
|
£25 |
2,197,831 |
2,569,568 |
|
Total: |
5,974,465 £416,221,075 |
6,011,195 £396,738,700 |
Source: NS&I
Andrew Westhead, NS&I retail director, said the change was the first since April and “reflects the changing landscape for savings”.
“Premium Bonds maintain their unique appeal by offering complete security backed by HM Treasury, the flexibility to withdraw easily and the excitement of potentially winning a tax-free prize each month,” he added.
“By making this adjustment now, we’re able to continue to balance the interests of savers, taxpayers and the stability of the broader financial services sector.”
Premium Bonds, launched in 1956, do not pay interest but instead offer a chance to win monthly tax-free prizes ranging from £25 to £1m. Each bond must be held for one full calendar month before qualifying for the draw.
Savers can hold up to £50,000 in bonds, which are fully backed by HM Treasury. Prizes are typically paid directly into a bank account or reinvested into new bonds.