Millions of Premium Bond holders are being urged to reconsider their investments as financial experts caution that the formerly favoured savings option is no longer providing good returns. Laura Suter from AJ Bell warned that many smaller savers are suffering significant losses and would benefit from transferring their funds to high-yield accounts or investment portfolios.

She said: "The Premium Bond prize fund is being cut again, taking it down to rates last seen two years ago... The rates are now significantly below the top rates in the market, meaning savers are paying a hefty premium for the safety and brand name of NS&I."

Lagging behind market performance

From August onwards, the prize fund rate has been reduced from 3.8% to 3.6%, substantially lower than the 5% interest currently

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