Millions of Brits with NS&I Premium Bonds issued warning over change starting in weeks

NS&I Premium Bonds will be changing in just weeks, it has been announced. Millions of Brits invest in the scheme in the hopes of winning cash in prize draws.

But from January 2025, the prize fund rate will be reduced, the government-backed savings bank has announced. The rate will drop from 4.15 per cent down to 4 per cent.

It comes as the prize fund rate for Premium Bonds is already due to be cut in the December draw - from 4.4 per cent to 4.15 per cent. The odds of winning in January will remain the same as in December at 22,000 to one.

POLL: Should Keir Starmer call another general election?

The number of prizes is set to drop from an estimated 82 prizes of £100,000 in January, down from 83 in December. There will be an estimated 166 prizes of £50,000 in January, down from 167 in December, Manchester Evening News reports.

The estimated number of £1million prizes will remain at two. There will also 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 is backed by the Treasury and 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.

Speaking to customers NS&I retail director, Andrew Westhead, 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 per cent Government guarantee, with the January 2025 draw set to deliver over 5.8 million tax-free prizes worth more than £431 million."

From December 20, the interest rate for its Direct Saver will reduce to 3.5 per cent AER (annual equivalent rate) and Income Bonds to 3.49 per cent AER. Both are reducing from 3.75 per cent.

Laura Suter, director of personal finance at AJ Bell, added: "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."

Brumwish 2024 - buy a gift for a child in need

BrumWish 2024 is Birmingham Live's festive drive to get thousands of gifts to children and young people across our city - among them the homeless, the vulnerable, kids in care, kids who are poorly or struggling, and kids who have little.

There are THREE simple ways to help.

1. Buy a new gift from the Brumwish 2024 Amazon giftlist. In just a click your donation will be whizzing its way to our volunteers at Edgbaston Stadium.
2. Donate money to the appeal fund hosted by Thrive Together Birmingham - this will help pay for gifts for kids with specialist needs or specific wishes.
3. Buy a gift and, even better, rope in friends, neighbours and workmates to do the same, then drop off your pressies at Edgbaston Stadium, Edgbaston Road, B5 7QU on Friday 6th December, 10am - 3pm; Saturday 7th December, 10am - 1pm; or Monday 9th December, 10am - 1pm. Volunteers will be there to help you. Please don't wrap your gifts. You can also drop off by arrangement until Monday 16th December - contact Louise on 07469 979286.

Thanks to our partnership with #Toys4Birmingham, every single gift will find a good home in the loving care of a child living in B&Bs or hotels, hostels or refuges, children receiving support from specialist organisations and charities, and families being supported by children's centres and charities around the city.

Making up the Brumwish and Toys4Birmingham gang are Thrive Together Birmingham, Birmingham Playcare Network, Warwickshire Cricket Foundation (the charitable arm of Warwickshire County Cricket Club), Birmingham Forward Steps and BirminghamLive/Birmingham Mail.

Thank you to Amazon UK and the amazing team at the Sutton Coldfield depot for their support.