Premium Bonds players have been issued a warning after NS&I slashed the chances of winning.
As of December’s draw, the Premium Bonds prize fund rate will be cut from 4.4 percent to 4.15 percent in a move which NS&I says is needed to help the company ‘meet its financing target’.
The odds of winning will also be reduced, from its current rate of 21,000;1 to a new rate of 22,000:1, the worst odds since August 2023.
There will still be two large jackpot winners, but the number of prizes worth £5,000 to £100,000 will be cut by 209.
The amount of the smallest prizes – £25 – will be increased by 10,866 but every other category of prize from £60 up to £100,000 will be reduced in numbers, apart from £1m, which remains at two prizes.
The total number of prizes will fall by nearly 300,000, down from 5,991,306 to 5,276,438 while the total prize fund will also go down from £461,330,525 to £436,686,300.
The changes will come as a blow to Premium Bonds players who will be hoping to turn their investments in Premium Bonds into big prizes.
Andrew Westhead, NS&I Retail Director, said: “As the savings market continues to change, we need to lower the rates on some of our products to help us meet our Net Financing target, while also ensuring we continue to balance the interests of our savers, taxpayers and the broader financial services sector.
“Even with the changes, we’re still expecting to pay out over 5.7 million prizes worth over £435 million in the December Premium Bonds draw.
“Our portfolio of both fixed and variable rate products, plus the unique position of Premium Bonds, continues to give savers the choices they need to help reach their savings goals, backed by the safety and security of our 100% HM Treasury guarantee.”
Premium Bonds are a savings account, except the amount of interest you generate can go up and down, decided by a monthly prize draw.
Every £1 bond you buy has a chance of winning, up to a maximum holding of £50,000 so the more you hold, the better your chance and there’s always a chance you could hit the £1m jackpot.
Premium Bonds are tax-free, so for those who have already maxed out their £20,000 annual ISA allowance and their £500 to £1,000 Personal Savings Allowance, they can be a good way to invest any remaining income without paying tax on the interest generated.
