Martin Lewis' MSE issues Premium Bonds warning and urges customers to 'move money'

James Rodger
·2-min read
Martin Lewis' MSE issues Premium Bonds warning and urges customers to 'move money'
-Credit: (Image: Reach Publishing Services Limited)


Martin Lewis' Money Saving Expert has issued a fresh warning to NS&I Premium Bonds holders. NS&I will cut its Premium Bond prize-fund rate to 4% from 4.15% for the January 2025 draw and beyond, MSE has warned customers.

From December 20, the rates for Direct Saver and Income Bonds will decrease, while the Premium Bonds prize fund rate will drop from 4.40% to 4.15%. In January, after Christmas, the Premium Bonds prize fund rate will fall further to 4% in response to changes in the savings market. However, the odds of winning will remain unchanged at 22,000 to one.

Andrew Westhead, NS&I retail director, explained: "We carefully review our savings rates in response to changes in the broader market. These adjustments help us meet our Net Financing target while balancing the interests of our savers, taxpayers, and the wider financial services sector."

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MSE, which was founded by ITV and BBC star Mr Lewis, said: "This rate was already lagging behind interest rates on standard savings accounts – so if you're a bondholder, you may want to consider moving your cash to an interest-paying account."

Despite the rate changes, NS&I assured savers that Premium Bonds remain a popular choice, backed by the 100% Government guarantee. The January 2025 draw is set to deliver over 5.8 million tax-free prizes worth more than £431million.

The interest rate for Direct Saver will fall to 3.50 per cent gross/AER, and Income Bonds will drop to 3.44 per cent gross/3.49% AER. NS&I is one of the largest savings organisations in the UK, offering a range of savings and investments to 25 million customers.

According to Moneyfactscompare’s research, the average easy access rate has dropped to 3.03 per cent this month while the average one-year fixed bond rate fell to 4.24 per cent - its lowest level since June 2023.

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