Fewer big money Premium Bonds prizes will be available from the April draw, as the prize fund rate is slashed from 4.00% to 3.80%.
Premium Bonds provider NS&I said the odds of winning will remain the same, at 22,000 to one.
The changes mean that, for example, the estimated number of £100,000 prizes will decrease from 82 in February to an estimated 78 in April.
The number of £50,000 prizes will fall from 164 in February to an estimated 157 in April, while the number of £25,000 prizes will reduce from 328 to around 313 over the same period.
The number of £10,000 prizes will fall from 820 in February to an estimated 781 in April.
The number of £1 million prizes up for grabs will remain the same, at two.
There will be more chances to win a £25 prize, with the number increasing from 1,807,915 in February to an estimated 2,170,903 in April.
The total value of the prize pot will reduce from £430,052,425 in February to an estimated £411,118,825 in April. The number of prizes will remain around level, at 5,864,354 in February and an estimated 5,901,229 in April.
As the end of the tax year approaches, NS&I has also increased the interest rate on its Direct Isa to 3.50% AER (annual equivalent rate) from Tuesday, from 3.00%.
From March 5, the interest rate for NS&I’s Direct Saver will fall to 3.30% AER from 3.50% and the rate on Income Bonds will decrease to 3.30% AER from 3.49%.
Andrew Westhead, retail director, at NS&I, which is backed by the Treasury, said: “We regularly review our products to ensure they reflect current market conditions. The changes we are making to Premium Bonds, Direct Saver and Income Bonds rates enable us to continue to balance the interests of savers, taxpayers and the stability of the broader financial services sector.
“Even with the change to the Premium Bonds prize fund rate, we are expecting more than 5.9 million tax-free prizes worth over £411 million to be won in the April 2025 draw.”
The moves follow the recent quarter point cut in the Bank of England base rate to 4.5%.
Sarah Coles, head of personal finance, Hargreaves Lansdown said: “NS&I is testing the loyalty of its premium bond holders by slashing the prize rate to 3.8%.
“It was bound to happen, because the easy access savings market has been inching south ever since this month’s Bank of England rate cut, and NS&I will be keen not to pay more than it has to.
“It’s also slashing the rate on two of its easy access savings products. Cash Isas have dodged the scythe though, and the rate has actually risen.”
