Premium Bonds savings customers are watching closely following the announcement that National Savings & Investments (NS&I) confirmed fresh interest rate reductions on a number of its well-known savings products. Although Premium Bonds haven’t been cut in any way yet however, the announcement has sparked concerns that changes in the rate of prize funds might be coming soon.
The decision comes amid an overall slowdown in UK saving market caused by a series of Bank of England base rate cuts. With savings rates that are easy to access falling across the board, a lot of savers are asking if Premium Bonds will be left unaffected or whether a cut could be just an issue of time.
Premium Bonds Prize Rate: Where It Stands Now
The Premium Bonds prize fund rate is currently 3.6 percent and the odds of winning being set at 22,000-1 for each PS1 bond that is owned. The rate has been cut several times in recent years, with adjustments in January, April and in August 2025.
In spite of the most recent NS&I announcement Premium Bonds weren’t in no way included in the latest cut-off.
Current Premium Bonds Prize Structure
- £ 1,000,000 jackpots two winners each month
- £ 100,000 in prizes Multiply each month
- £ 50,000 prizes: Multiple
- Lower rewards (£ 25-£ 1,000): Thousands given out monthly
Premium Bonds continue to be popular with many savers due to the following reasons:
- Tax-free prizes
- 100% support from the government
- There is no risk to capital
However, they aren’t 100% guaranteed and are based on luck, not interest.
NS&I Announces Rate Cuts Overview
| Key Detail | Information |
| Institution | National Savings & Investments (NS&I) |
| Announcement Date | January 2026 |
| Products Affected | Direct Saver, Income Bonds |
| Premium Bonds Status | The rate of the prize is unchanged (for right now) |
| Current Prize Fund Rate | 3.6% |
| Bank of England Base Rate | 3.75% |
| Next Review Risk | Medium to High |
| Backed By | UK Government |
| Official Website | https://www.nsandi.com/ |
New NS&I Rate Cuts Confirmed for February 2026
NS&I confirms that two of the most popular savings products will be subject to rate reductions starting on February 12th, 2026.
NS&I Savings Rate Changes
| Product | Old Rate | New Rate |
| Direct Saver | 3.30% | 3.05% |
| Income Bonds | 3.30% | 3.05% |
They are among the first major changes on these accounts in the beginning of March 2025 They are a reflection of the general reduction in the market for savings.
Andrew Westhead, NS&I’s Retail Director, stated that rates are frequently reviewed and must take into account:
- The value of saving
- Costs to taxpayers
- Stability of the financial system
What This Means for Premium Bonds Savers
Although Premium Bonds weren’t affected this time, financial experts warn that they’re unlikely to be immune for a long time.
Sarah Coles, Head of Personal Finance at Hargreaves Lansdown stated that NS&I will strive to make sure that Premium Bonds don’t get excessively generous when compared to accounts for savings that are simple-to-access.
Her message was unambiguous:
“Premium Bonds ” holders might be feeling relieved at present but they’re not completely quite out of the woods at this point.”
If rates for savings remain low in other areas, NS&I may be forced to modify the rate of interest on prize funds to ensure the balance.
The Role of the Bank of England Base Rate
The main driver for NS&I’s decision lies in the Bank of England base rate currently at 3.75 percent which is down from a maximum of 5.25 percent on August 20, 2023.
Since then:
- Six rate reductions were implemented
- Four cuts took place in 2025 all by themselves
As the cost of borrowing decreases the savings rate usually follows, reducing bank pressure and other government-backed institutions like NS&I to give higher returns.
Recent Premium Bonds Winners Still Making Headlines
Despite the uncertainty, Premium Bonds continue to attract the attention of the public. They were the 2 initial PS1 million winners in 2026 were announced by Suffolk as well as Berkshire to further strengthen the appeal of the product.
Monthly Premium Bonds Prizes Snapshot
| Prize Amount | Frequency |
| £ 1,000,000 | 2 every month |
| £ 100,000 | Several |
| £ 50,000 | Several |
| £ 25-£ 1,000 | Thousands |
Bond holders can track their winnings by using:
- NS&I Prize Checker website
- NS&I mobile app
Are Premium Bonds Still Worth It in 2026?
Premium Bonds are well-liked, particularly with:
- Higher-rate taxpayers
- Savers that are close to personal savings allowances
- People prioritizing capital safety
As the interest rates drop the savers need to reevaluate the following:
- Guaranteed interest accounts are a greater value
- They have a premium Bonds holding is large
- They depend too much on the chance of a return
The expected yield from Premium Bonds is contingent greatly on the amount you own and whether you have a regular winning streak.
What Savers Should Do Now
If you own Premium Bonds, or any other NS&I products:
- Check your savings plan
- Compare the returns of your accounts with ease-of-access and fixed-rate accounts.
- Don’t think that premium bond prices are “protected”
- Be on the lookout for NS&I announcements closely in 2026.
Diversification is still essential, especially in an environment of changing rates.
Recent rate cuts from NS&I indicate the evident shift to lower savings yields throughout the UK market. While Premium Bonds are not affected this time, pressure is growing.
The prize fund rate is unchanged, but as base rates fall along with the other NS&I products already reduced, Premium Bonds may be subject to changes after 2026. Savers should be alert as well as informed and flexible as the world of savings continues to change.
FAQ’s
Q1. Have Premium Bonds interest rates been cut in 2026?
No. In the moment it appears that the Premium Bonds Prize Fund rate is 3.6 percent However, future cuts could be made.
Q2. Why is NS&I cutting savings rates?
NS&I adjusts rates in order to match Bank of England base rate adjustments as well as market conditions and targets for funding by the government.
Q3. Should I move my money out of Premium Bonds?
This is contingent on your objectives. Premium Bonds can provide tax-free cash prizes as well as capital security However, savings accounts that are guaranteed may provide more reliable yields.
