Overview

• NS&I will cut the Premium Bonds prize fund rate from 3.8% to 3.6% for the August draw, affecting around 24 million bondholders
• All winnings remain tax-free and investors’ capital is fully secured by the UK Treasury
• Individual odds of winning hold steady at about 1 in 22,000 per £1 stake with two £1 million prizes awarded each month
• Savers risk real-term losses because the prize fund rate now trails UK inflation and many cash ISAs offer interest rates above 4%
• Financial experts recommend comparing potential Bond returns with higher-yield cash ISAs and other savings accounts before deciding