Premium Bonds prize fund rate to reduce from the January 2025 draw
NS&I said it carefully reviews rates in response to changes in the broader market.
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Your support makes all the difference.The prize fund rate for Premium Bonds will become less generous from the January 2025 draw, NS&I has announced.
It will reduce to 4%, down from 4.15%, the Treasury-backed savings giant said.
The prize fund rate for Premium Bonds is already due to be cut to 4.15% in December, down from 4.4%, according to an earlier announcement.
The odds of winning in January will remain the same as in December – at 22,000 to one.
The changes include an estimated 82 prizes of £100,000 in January, down from 83 in December.
We carefully review our savings rates in response to changes in the broader market
There will be an estimated 166 prizes of £50,000 in January, down from 167 in December.
The estimated number of £1 million prizes will remain the same, at two.
There will be a higher number of lower-value prizes of £25 in January, estimated at 1,815,854, up from 1,509,458 in December.
NS&I, which is backed by the Treasury, has a duty to balance the needs of savers, taxpayers and the wider financial market. The Bank of England base rate has been cut twice this year.
Andrew Westhead, NS&I retail director, said: “We carefully review our savings rates in response to changes in the broader market.
“These adjustments help us meet our net financing target while balancing the interests of our savers, taxpayers and the wider financial services sector.
“Premium Bonds remain a popular choice for millions of savers, backed by the 100% Government guarantee, with the January 2025 draw set to deliver over 5.8 million tax-free prizes worth more than £431 million.”
NS&I added that from December 20 the interest rate for its Direct Saver will reduce to 3.5% AER (annual equivalent rate) and Income Bonds to 3.49% AER.
Both are reducing from 3.75%.
Laura Suter, director of personal finance at AJ Bell, said: “The rates are now significantly below the top rates in the market, meaning savers are paying a decent premium for the safety and brand name of NS&I.
“Anyone with money in easy access NS&I accounts should weigh up whether they would be better switching to a rival to clinch some extra interest.”