Prizes for Premium Bonds will start to fall from March with the number of top prizes available cut, NS&I announced today.
As a result, the price rate will fall to 4.4% from 4.65% with the number of monthly top prizes of £100,000 dropping to 85 from 91 and £50,000 winners falling to 170 from 182.
It is the first time NS&I has cut the prize rate since 2020 having hit a 24-year-high in 2023 as base rates rose.
The odds of winning remain at 21,000 to 1 for each bond.
Andrew Westhead, retail director at NS&I, said: “These changes reflect our requirement to strike a balance between the interests of our savers, taxpayers and the stability of the broader financial services sector.”
Sarah Coles, head of personal finance, Hargreaves Lansdown, commented: “The coffers are full to bursting at NS&I. It doesn’t need to attract more cash, so it’s applying the brakes, and Premium Bond holders are paying the price.
“If this doesn’t halt the flow of cash, there may well be more cuts on the cards.
"NS&I has a full-year fundraising target of £7.5 billion, but after offering a bumper rate on its one-year fixed rate bonds in September, it attracted an eye-watering £7.7 billion of savings in a single month, and overshot its target – sitting on £9.8 billion at the end of September, just halfway through its financial year.”