NS&I will reduce the Premium Bond rate from 4.15% to 4% in January, while also cutting the rates on other savings accounts. Are Premium Bonds still worth it?

Effective Rate Of Return Drops To 4.00% In 2025 National Savings and Investments (NS&I), the government-backed savings bank, is pulling

The number of each prize amount will drop apart from the number of smallest prizes, worth £25, which will increase by about 300,000, which will actually mean there will be more prizes in January, as the number of prizes can fluctuate. This is how many prizes there will be in January, compared to December:

The NS&I website states: "Premium Bonds don’t earn interest. Instead, there’s an annual prize fund rate that funds a monthly prize draw for tax-free prizes. Remember that inflation can reduce the true value of your money over time.

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Premium Bonds customers have been urged to rethink their savings strategy, as most Bond holders never take home a prize. Savers already have cause for concern about whether or not the prize-based Bonds scheme is really worth it, with the prize fund rate set to drop from the December draw, decreasing from 4.4 percent to 4.15 percent.

Premium Bonds holders are being hit by another drop in the prize fund rate from January as the number of big cash prizes will fall. The prize fund rate is already on the decline dropping in the December draw from 4.4 percent to 4.15 percent, and will now see a further decrease in January to 4 percent.