As of 30 November 2025, Premium Bond savers are at the centre of a quiet revolution in the UK’s savings landscape.
Chancellor Rachel Reeves’s Autumn Budget has ordered National Savings & Investments (NS&I) to raise an extra £1 billion from the public, while also cutting future cash ISA limits. Together with rising NS&I bond rates and a possible Bank of England rate cut in December, that puts Premium Bonds and other NS&I products firmly in the spotlight. Bank of England
In this explainer, we’ll unpack all the key news and analysis up to 30 November 2025 and what it could mean for your savings.
The big change: NS&I told to raise an extra £1bn
In Budget 2025, the government formally increased NS&I’s net financing target for 2025–26 from £12 billion to £13 billion, within a range of plus or minus £4 billion. Gov
Put simply:
- NS&I was originally expected to raise £12bn net from savers this tax year.
- It must now aim for £13bn, with wiggle room between £9bn and £17bn. Gov
- By the halfway point of the year (to 30 September 2025), NS&I had achieved £3.9bn of net financing – leaving it more than £9bn short of the new central target. NS&I Corporate
NS&I’s own statement makes clear that its “pricing is designed to meet this revised target and maintain market stability”, code for: interest rates and prize rates are now an active policy tool to pull in more money. NS&I Corporate
That’s where Premium Bonds and NS&I fixed-rate bonds come in.
Where Premium Bonds stand today (30 November 2025)
Despite all the noise, Premium Bonds themselves have not yet changed in response to the Budget. As of the November 2025 draw:
- The Premium Bonds prize fund rate is 3.60% a year. IFA Magazine
- This was cut from 3.80% for the August 2025 draw, the third prize-rate reduction in 2025 after earlier cuts in January and April. Moneysavingexpert
- The odds of any £1 bond winning a prize remain 22,000 to 1 each month, unchanged by the latest cuts. MoneySavingExpert.com
NS&I’s recent press material about the November jackpot winners confirms that both the October and November 2025 draws ran on a 3.60% prize fund rate with the 22,000:1 odds intact. NS&I Corporate
Meanwhile, analysis from AJ Bell and others suggests that around two‑thirds of bondholders have never won a prize at all, underlining the lottery-like nature of Premium Bonds compared with guaranteed-interest accounts. Wikipedia
Bottom line right now: the Budget hasn’t yet changed Premium Bonds payouts – but it has increased the pressure on NS&I to tweak them.
Why the £1bn target puts Premium Bonds in the firing line
The logic is simple:
- The Treasury wants more money from savers. Budget 2025 explicitly revises NS&I’s target up by £1bn to £13bn, to help fund government spending alongside traditional gilt issuance. Gov
- NS&I is behind schedule. With only £3.9bn raised in the first half of the year, NS&I needs to attract substantially more deposits between now and March 2026. MoneyWeek
- The main way it attracts money is by tweaking rates. NS&I has already shown in the past (for example in 2022–23 and again in 2023–24) that raising the Premium Bond prize rate and other savings rates is its go-to lever when the Treasury asks it to bring in more cash. MoneySavingExpert.com
That’s why a string of recent coverage – including MoneyWeek, GB News and Telegraph reporting – suggests Premium Bond changes “could be on the way” after Reeves’s Budget. X (formerly Twitter)
MoneyWeek, for example, highlights:
- The new £13bn target
- The £3.9bn raised so far
- And notes that NS&I may need to “make its products more appealing”, potentially by raising the prize fund rate from 3.6% despite wider expectations that savings rates will fall over 2026. MoneyWeek
Similarly, GB News calls the Budget-driven overhaul a “boon for savers” and talks about “real hope for bondholders” that prize rates could improve if NS&I is forced to compete harder for cash. GB News
NS&I is already moving: British Savings Bonds now pay over 4%
Even though Premium Bonds are unchanged so far, NS&I has already pulled one major lever: fixed-rate British Savings Bonds.
On 7 November 2025, NS&I launched new issues of its 1‑, 2‑, 3‑ and 5‑year British Savings Bonds (Guaranteed Growth Bonds and Guaranteed Income Bonds) with higher interest rates: MoneySavingExpert.com
- 1‑year Growth Bond: up from 4.04% to 4.20% gross/AER
- 2‑year Growth Bond: up from 3.85% to 4.10%
- 3‑year Growth Bond: up to 4.16%
- 5‑year Growth Bond: up to 4.15%
Equivalent Income Bonds now pay just under those figures in monthly interest, but with the same 4.20% or 4.15% AER. NS&I Corporate
Independent analysis from MoneySavingExpert and MoneyWeek finds that:
- These 4.10–4.20% NS&I fixes are now close to the best rates on the market – often topping the tables among big, well-known providers. Moneysavingexpert
- But smaller challenger banks still offer slightly higher fixed rates, up to around 4.4–4.5%, if you’re willing to sacrifice the NS&I government guarantee and put up with different risk and protection rules. Moneysavingexpert
NS&I itself is clear that these higher bond rates are part of meeting that enlarged funding target. NS&I Corporate
Translation: NS&I has already shown it is willing to raise rates to meet the Treasury’s £13bn challenge – and Premium Bonds are the obvious next candidate.
Expert commentary: “Premium Bonds prize rate could be in the frame”
So what are analysts actually saying about Premium Bonds?
Hargreaves Lansdown
Mark Hicks, head of Active Savings at Hargreaves Lansdown, has suggested that:
- The 3.6% prize fund rate might hold steady for now, even as conventional savings rates drift lower across the market.
- But in the context of the higher NS&I funding target, Premium Bonds are likely to remain central to NS&I’s fundraising plans. MoneyWeek
His view broadly is that if NS&I’s other products fall down the best-buy tables, it may have to push Premium Bonds back up the agenda, either by raising the prize fund rate or improving the prize distribution.
AJ Bell
Laura Suter, AJ Bell’s director of personal finance, goes further. She argues that:
- When the Treasury raises NS&I’s net-financing target, NS&I usually responds in “the only way it really can: by making its products more appealing”.
- With the target now £1bn higher, she sees a clear possibility that Premium Bonds will be part of that response – whether via the prize fund, other NS&I rates, or both. MoneyWeek
Media coverage
Across the media, the framing is similar:
- The Telegraph and other outlets repeatedly note that Premium Bonds rates could rise after Reeves revealed she would need another £1bn from savers for the Treasury’s coffers. AOL
- Regional coverage (for example from ChronicleLive, via social channels) says “Premium Bond changes could be on the way in the wake of the Autumn Budget”. X (formerly Twitter)
Crucially, though, as of 30 November 2025 there has been no official NS&I announcement of a Premium Bonds prize-rate increase. The speculation is grounded in the Budget numbers and past behaviour, not a confirmed policy.
The wider backdrop: Bank of England and falling inflation
Part of the story here is what’s happening to interest rates more broadly.
- On 6 November 2025, the Bank of England’s Monetary Policy Committee voted 5–4 to keep the base rate at 4.0%, with four members pushing for a cut to 3.75%. House of Commons Library
- Market pricing and commentary from economists suggest there is now a strong chance of a rate cut at the 18 December 2025 meeting, especially after Reeves’ Budget and softer inflation data. Reuters
- A YouGov/Citi survey shows inflation expectations falling sharply to 3.7% in November, supporting the case for easier monetary policy. Reuters
If Bank Rate does fall in December and again in 2026, the general trend in the market is likely to be lower savings rates over time. That’s what makes the current NS&I fixed-rate deals and a possible future Premium Bond prize-rate rise particularly time‑sensitive.
Cash ISA cuts: another nudge away from simple savings
Budget 2025 didn’t just tweak NS&I; it also hit cash ISAs, which are a major competitor for savers’ money.
Key ISA changes announced:
- From April 2027, the annual tax‑free cash ISA limit for under‑65s will fall from £20,000 to £12,000.
- Savers aged 65 and over will keep the full £20,000 cash ISA allowance. Trustnet
- Transfers from stocks and shares ISAs into cash ISAs are set to be banned, and HMRC plans to tax interest on cash held inside investment ISAs, to discourage parking large sums in low-yield cash. MoneyWeek
The official intention is to push more money into investment ISAs and the stock market, but in the short term it also:
- Encourages banks to compete harder on cash rates before the lower limit takes effect. MoneyWeek
- Makes tax‑free, prize‑based products like Premium Bonds more attractive as an alternative shelter, especially for cautious savers who don’t want equity risk. The Times
Combine that with NS&I’s bigger fundraising target and you can see why many commentators expect more action from NS&I on Premium Bonds.
What this all means for different types of saver
Important: The following is general information, not personal financial advice. Always consider your own circumstances or seek regulated advice.
1. Cautious savers who love Premium Bonds
If you’re mainly in Premium Bonds because you like the safety plus lottery element:
- Right now your effective “rate” is 3.6% tax‑free, but that is an average prize fund, not a guaranteed return. NS&I Corporate
- The odds remain long (22,000:1 each month for every £1 held), and research suggests many people never win at all. Wikipedia
- If NS&I does raise the prize fund rate in response to the new target, it would improve the average outcome, but the distribution would still be lottery-style, with a few big winners and many getting nothing.
For this group, the key decision is: Are you comfortable with the gamble if rates elsewhere fall, or would you rather lock in a guaranteed 4%+ for a few years while you can?
2. Savers wanting guaranteed returns and total safety
If you prefer certainty over jackpots, NS&I’s new British Savings Bonds now offer:
- Fixed rates of around 4.10–4.20%, backed 100% by the government. MoneyWeek
- Terms from 1 to 5 years, with no access during the term. NS&I Corporate
These deals can still be beaten by the very top of the wider savings market, but NS&I’s unique attraction is that every penny is backed by HM Treasury, with no £85,000 cap as under the standard FSCS deposit guarantee. Moneysavingexpert
For people with very large cash holdings, that security can outweigh the small rate gap versus challenger banks.
3. Tax‑conscious savers
If you’re bumping up against your personal savings allowance and soon the lower cash ISA limit, several moving parts matter:
- Interest from British Savings Bonds and other NS&I accounts is taxable, while Premium Bond prizes are tax‑free. NS&I Corporate
- From 2027, the cash ISA cap of £12k (for under‑65s) will make it harder for higher earners to shelter large cash balances from tax. Reuters
- Some experts warn that the ISA cut and higher savings tax rates will push savers either into investing or into tax-free options like Premium Bonds and certain investment products. The Times
For this group, Premium Bonds might become more interesting if the prize fund rate rises – but they still carry the risk of long periods with no return at all.
Key questions answered (as at 30 November 2025)
1. Have Premium Bond rates gone up yet after the Budget?
No. The prize fund rate remains 3.60%, and the odds are still 22,000:1 per £1 bond per month. NS&I Corporate
What’s changed is:
- NS&I’s funding target has risen by £1bn. NS&I Corporate
- Analysts and media now widely expect Premium Bonds to be “in the frame” for future changes. X (formerly Twitter)
But there is no official announcement of a prize-rate rise as of 30 November 2025.
2. Could NS&I cut Premium Bond rates again instead?
It’s possible in theory, but less likely in the near term given:
- The higher funding target, which argues for more attractive rates. GOV.UK
- The strong competition from banks offering 4%+ fixed rates and high easy-access returns. Moneysavingexpert
However, if the Bank of England carries out several cuts and market rates drop sharply in 2026–27, NS&I could decide it no longer needs such generous products and might trim rates again then. Bank of England
3. Is now a good time to buy Premium Bonds before any potential rate rise?
There’s no official announcement or guaranteed timing for any change, so there is no “locked-in” advantage to buying immediately – Premium Bonds don’t offer backdated prizes for time before you entered.
The more practical questions to ask yourself are:
- Am I happy with the chance‑based nature of returns?
- Would I be better off locking in a guaranteed 4%+ fixed rate instead, especially if the Bank of England cuts rates soon?
Financial commentators generally stress that Premium Bonds shouldn’t be treated like a standard savings account: they suit people who can tolerate the risk of poor returns in exchange for a small chance of a big, tax‑free win. Wikipedia
4. What key dates should savers watch now?
A few dates matter:
- 18 December 2025 – next Bank of England rate decision, which could bring the first cut to 3.75%. Bank of England
- The first few Premium Bond draws in 2026 – NS&I often times changes to begin from specific monthly draws, and it typically updates prize rates via press releases. NS&I Corporate
- April 2027 – start date for the new £12k cash ISA limit for under‑65s, subject to legislation and final rules. Sky News
Any NS&I announcement on Premium Bonds will almost certainly appear first on its corporate or adviser websites and through mainstream financial news.
The takeaway for savers
As of 30 November 2025, here’s the situation in one snapshot:
- NS&I must raise £1bn more than planned this year, taking its net financing target to £13bn. NS&I Corporate
- It has already hiked fixed bond rates to just over 4%, signalling it is ready to use pricing to pull in cash. MoneyWeek
- Premium Bonds remain at a 3.6% prize fund rate with unchanged odds, but there is intense speculation that they could be next in line for tweaks. GB News
- The cash ISA limit cut from 2027 and expected base-rate reductions create a shifting backdrop where tax-free prizes and government-backed rates look increasingly important. The Times
For now, the story is one of transition rather than completed change. Savers are being nudged – by both the Treasury and the Bank of England – to rethink where their money sits, and NS&I is at the heart of that shift.
If you hold Premium Bonds or are thinking of buying, it’s worth:
- Keeping a close eye on NS&I announcements over the next few months
- Comparing the expected return from Premium Bonds with guaranteed rates on NS&I bonds and top-paying bank accounts
- Considering how the new ISA rules and your tax position affect the value of tax-free prizes vs taxable interest
