Premium Bonds savers could be landed some good news as speculation grows that National Savings and Investments (NS&I) could raise the prize rate again this year. The Treasury-backed savings institution has been tasked with bringing in more money for the Government this financial year, which could mean making Premium Bonds more attractive to invest in.

As per Rachel Reeves’s Spring Statement, NS&I has been targeted to attract £12billion before the next financial year starts in April 2026, marking a sizeable increase from last year’s £9billion. Therefore, This Is Money’s Sylvia Morris has suggested it could entice NS&I to remain competitive with rates to attract more business. She said if they don’t raise rates, it should at least mean they won’t cut them any time soon.

The annual prize fund rate for Premium Bonds has been on the decline since the start of the year “in response to the changing savings market.” Savings interest rates have been falling across the board since the Bank of England cut the central base rate in February, with more cuts expected as the year progresses.

The annual prize fund rate for Premium Bonds for April was reduced to 3.8%, down from 4%. However, the odds of any single £1 Bond number winning a prize remain at 22,000 to one.

What are Premium Bonds?

Premium Bonds are a savings account offered by NS&I, one of the largest savings institutions in the UK backed by the Treasury. The accounts don’t earn interest traditionally and consistently. Instead, each bond is entered into a monthly randomly generated prize draw.

Between £25 and £50,000 can be invested in the account overall, and prizes of up to £1million can be won at the start of every month. NS&I says the more bonds a person has, the higher their chance of winning a prize.

A total of 5,914,009 prizes worth £412,009,175 will be paid out in the April 2025 prize draw. These prizes are drawn from a pool of 130,108,160,431 eligible Bond numbers.

Premium Bonds holders can easily see if they’ve won a prize in a draw by checking the NS&I website, the prize checker app, or simply asking Alexa.

However, savers should be aware that investing in Premium Bonds does not always guarantee prizes. People can go years without winning anything, which some money experts argue makes traditional interest-earning savings accounts more lucrative.

Speaking previously on his BBC 5Live podcast, the Martin Lewis Podcast, Martin Lewis said: “Most people should be looking at putting money in Cash ISAs first because, with typical luck, you will win substantially more in a top one-year fix than you would in Premium Bonds and you’d see them win more in an easy access cash ISA.

“The thing about Premium Bonds is people live the dream in the hope that they’re going to be the person who wins the £1million and virtually nobody will – but that’s why it’s appealing.

“People always say things like ‘I win £25 every month’, and in my cynical head I go ‘yeah but if you put the same amount of money in the top cash ISA, you get a guaranteed win of £40 every month’.”

Mr Lewis added: “They’re not awful, I’m just about ‘what’s the best?’, and for me, they’re not the best.”