MoneyPremium BondsYou may want to rethink your savings plansNicholas Dawson07:08, 20 May 2026Updated 07:08, 20 May 2026Premium Bonds holders have been cautioned that turbulent times may lie ahead for the popular savings product. This comes after recent changes were announced by provider NS&I to its monthly prize draw structure.‌NS&I has informed savers that it will boost the prize fund rate from July's draw, rising from the current 3.3 per cent to 3.8 per cent. The odds of winning for each £1 Bond will also improve, shifting from 23,000 to one to 22,000 to one. This welcome development arrives shortly after NS&I previously slashed the rate from 3.6 per cent down to 3.3 per cent for April's draw. The winning odds were also reduced at that time, moving from 22,000 to one to 23,000 to one.‌Over 2025, the prize fund rate was trimmed on three separate occasions. Jennifer Crichton, senior wealth planner at wealth management group Killik & Co, explained that these adjustments reflect changes across the broader savings landscape.‌She said: "The prize fund rate for Premium Bonds is variable and broadly tracks the Bank of England rate, so as interest rates have come down, the effective rate on offer has followed, and savers should expect fluctuations. Savers who rely heavily on Premium Bonds as a primary savings vehicle shouldn't assume prize fund rates will remain the same, and building a broader savings plan is a sensible approach."State Pensioners to face major tax change‌The financial expert urged those reconsidering their strategy to adopt a "three-pot framework" when managing their savings, which divides funds into three distinct categories. Ms Crichton explained: "The first pot is an emergency fund. This typically covers three to six months of essential outgoings, sometimes more, and is held in cash for more immediate access."Premium Bonds can sit in this pot, as they're Government-backed and can be accessed upon request. The second pot covers near-term goals, money that likely needs accessing within the next three to five years for foreseeable costs, e.g. larger payments or planned purchases."'More predictable'For these medium-term financial targets, she advised looking at top-rate fixed-term savings accounts or cash ISAs, which offer "more predictable interest" compared to Premium Bonds.Article continues belowIt's worth noting that NS&I can change their terms at any time, meaning your chances of winning a prize can fluctuate, and you could go months or even years without a payout. The financial expert then outlined the third and final savings pot to bear in mind.She said: "The third savings pot is for the long term, so money that you do not expect to need for at least 5 years. Investing is likely to be the best option to grow this pot and protect from the effects of inflation."Stocks and Shares ISAs are a very tax-efficient option for this third pot, benefitting from tax-free growth and withdrawals. However, all investing comes with risks. Keeping those three pots distinct is important to ensure long-term savings can work harder for longer, while Premium Bonds remain a liquid, low-risk aspect of an overall savings plan."Choose Daily Mirror as a 'Preferred Source' on Google News for quick access to the news you value.‌Premium BondsKillik and CompanyBank of EnglandBanksInterest ratesCash ISASavings