Premium Bonds holders will be frustrated to learn the prize fund rate in the monthly draw is dropping for a second time in January with fewer big prizes to win.
The prize fund rate is already falling in the December draw, down from the current 4.4 percent to 4.15 percent, but this will be decreasing again for the January draw, down to 4 percent.
The odds of each £1 Bond winning are dropping in December, down from 21,000 to one to 22,000 to one, but this will stay the same in January.
There will still be the two £1million jackpots in the monthly draw, but the number of other big cash prizes will fall from January, including the number of £100,000, £50,000 and £25,000 prizes on offer.
Andrew Westhead, NS&I retail director, said of the drop in prizes: “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 percent Government guarantee, with the January 2025 draw set to deliver over 5.8 million tax-free prizes worth more than £431million.”
Estimated figures from NS&I comparing the December draw to January show there will be one less £100,000 prize and one fewer £50,000 prize, three fewer £25,000 prizes and seven fewer £10,000 prizes.
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:
- £1,000,000 – 2 (unchanged)
- £100,000 – 82 (down from 83)
- £50,000 – 166 (down from 167)
- £25,000 – 329 (down from 332)
- £10,000 – 823 (down from 830)
- £5,000 – 1,648 (down from 1,664)
- £1,000 17,277 (down from 17,426)
- £500 – 51,831 (down from 52,278)
- £100 – 2,001,028 (down from 2,072,099)
- £50 – 2,001,028 (down from 2,072,099)
- £25 – 1,815,854 (up from 1,509,458).
Total prizes
- 5,890,068 prizes (up from 5,726,438 prizes)
- £431,938,050 (down from £435,686,300).
As Bond holders face a second rates cut in two months, customers have been encouraged to ask themselves if the savings option is right for them.
Sarah Coles, head of personal finance at Hargreaves Lansdown, warned the the odds may not be in your favour: “If you hold the Bonds, you need to be absolutely certain you understand how they work, and that despite a prize rate of 4 percent, in an average month, the average bond holder with £1,000 in bonds will earn nothing.
“In the interim, the slight resurgence of inflation means your money will be losing more spending power. If you’re happy with this trade off, you may choose to stay put.
“However, if you want to switch, there are still plenty of decent rates on offer in the easy access savings market.”
Previous research from AJ Bell found two thirds of Bond customers never win a prize. You can check if you have any prizes to collect using the prize checker tool on the NS&I website.
