Martin Lewis explains whether Premium Bonds are 'worth it' after rule change

The Premium Bonds prize fund is set to be slashed by NS&I from January 2025. The BBC and ITV star Martin Lewis has explained whether the changes from National Insurance and Savings means Premium Bonds may be "not worth it".

Money Saving Expert's Mr Lewis wrote on MSE: "Premium Bond prize rate to fall to 4% in Jan - are they worth it? See Premium Bonds analysis." Sarah Coles, head of personal finance, Hargreaves Lansdown said between November and January, the rate on Premium Bonds will have dropped from 4.4 per cent to 4 per cent.

"It’s unlikely to put enthusiastic savers off the product, but it should make them think twice about the interest they’re missing out on elsewhere," she said. "We know Premium Bond fans are unlikely to vote with their feet in huge numbers. The product is a national treasure, and an awful lot of people are wedded to them for life."

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Ms Coles said: "They’ve faced pretty some dire prize rates in the past when rates were lower, so they’ve lived through worse than this." "In the interim, the slight resurgence of inflation means your money will be losing more spending power. If you’re happy with this trade off, you may choose to stay put. However, if you want to switch, there are still plenty of decent rates on offer in the easy access savings market," she went on and added.

"Some people will be hanging on because they have a large sum of savings they want to see in one place, without worrying about busting protection limits (elsewhere only the first £85,000 with each institution is protected).

"However, cash savings platforms offer a decent alternative. They let you spread the cash between different banks, and still see it all in one place – without sacrificing the rate.”