Premium Bonds holders are set to face another blow as NS&I has announced a reduction in the Premium Bond prize rate to 3.8% which will come into effect in the April prize draw.

This marks the second cut this year following a decrease from 4.15% to 4% in January.

While the odds of winning remain at 22,000 to one, the change affects the distribution of prizes.

Martin Lewis' highlighted that with this cut, Premium Bonds will fall even further behind regular savings accounts, suggesting savers "consider moving your cash" as it becomes "even easier to beat elsewhere".

Martin Lewis has frequently cautioned savers about Premium Bonds due to their lack of guaranteed interest, which is crucial for ensuring savings don't lose value over time when the interest rate exceeds inflation.

Although Premium Bonds offer the chance of a £1 million prize, without significant wins savings could diminish in real terms because of inflation.

In contrast, some of the best easy access accounts are currently offering rates close to 5%.

Premium Bonds still offer some advantages, such as being tax-free like ISAs, which can be a significant benefit for those with large savings or in higher income tax brackets.

However, the top cash ISA currently offers a 5.25% interest rate, outperforming the Premium Bonds option.

There is a limit of £20,000 that can be invested in any ISAs each financial year, so if you've hit this cap, Premium Bonds could be a secondary option.

The prize rate isn't the only NS&I figure set to change, as some of the interest rates on its savings products will also shift ahead of the new financial year in April.

This includes an increase to 3.50% interest rates on Direct ISA accounts. Meanwhile, Direct Saver accounts will see a drop from 3.50% to 3.30% interest rate as of March 5.

On the same day, Income Bonds with the NS&I will drop from 3.44% gross interest to 3.26% gross interest.

More information on these changes can be found on the .