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| Premium bonds: odds on winning prize set to lengthen | Premium bonds: odds on winning prize set to lengthen |
| (5 months later) | |
| The odds of winning a prize for Britain's 21.5 million premium bond holders have worsened, after changes reduced the prize fund. | The odds of winning a prize for Britain's 21.5 million premium bond holders have worsened, after changes reduced the prize fund. |
| National Savings & Investments (NS&I) said on Tuesday it was cutting the proportion of the total invested amount paid out in prizes from 1.5% to 1.3% a year from 1 August 2013. | National Savings & Investments (NS&I) said on Tuesday it was cutting the proportion of the total invested amount paid out in prizes from 1.5% to 1.3% a year from 1 August 2013. |
| As a result, the odds of winning with each £1 bond number will lengthen – from 24,000-1 to 26,000-1. | As a result, the odds of winning with each £1 bond number will lengthen – from 24,000-1 to 26,000-1. |
| While the total value of prizes this month was £57m, it is estimated this will fall next month to £49m. This includes three £100,000 prizes – down from five in July – and 11,891 £100 prizes – down from 33,552. | While the total value of prizes this month was £57m, it is estimated this will fall next month to £49m. This includes three £100,000 prizes – down from five in July – and 11,891 £100 prizes – down from 33,552. |
| The move will come as a blow to many long-suffering savers, some of whom have turned to NS&I products such as premium bonds as an alternative to traditional savings accounts offering paltry interest rates. | The move will come as a blow to many long-suffering savers, some of whom have turned to NS&I products such as premium bonds as an alternative to traditional savings accounts offering paltry interest rates. |
| NS&I said it aimed to set the prize fund rate in a way that balanced the interests of savers, taxpayers and the stability of the broader financial services sector. A spokesman said: "Interest rates have fallen over recent months in the savings sector, resulting in NS&I savings being increasingly competitive. The reduction in the premium bond prize fund rate reflects current lower interest rates across the savings market." | NS&I said it aimed to set the prize fund rate in a way that balanced the interests of savers, taxpayers and the stability of the broader financial services sector. A spokesman said: "Interest rates have fallen over recent months in the savings sector, resulting in NS&I savings being increasingly competitive. The reduction in the premium bond prize fund rate reflects current lower interest rates across the savings market." |
| In June NS&I announced it would reduce interest rates on its income bonds, Direct Saver and Direct Isa with effect from 12 September. | In June NS&I announced it would reduce interest rates on its income bonds, Direct Saver and Direct Isa with effect from 12 September. |