THE TELEGRAPH: Premium bonds, one of the country's most popular savings products, have been hit by the Bank of England slashing interest rates.
New figures showed that there were just two winners for the £25,000 monthly prize, compared to 19 in November and 78 in December last year.
The total prize fund has also been slashed, although there remain two £1 million jackpot prize winners each month.
National Savings & Investments runs the scheme, and will be expected to cut the fund further if the bank rate drops as predicted on Thursday from 3 per cent to possibly as low as 2 per cent.
The sharp cuts in the bank rate in recent months has hit hard the number of winners that NS&I can name.
In cash terms, the total prize fund fell from £89 million in November to £58 million in December, with the number of prizes dropping from 1.56 million to 1.07 million in the same period. >>> By Harry Wallop | December 2, 2008
THE TELEGRAPH: Savers Make a Dash for Premium Bonds
Money is flooding into National Savings as investors seek a safe haven for their cash.
Billions of pounds is being invested in National Savings Premium Bonds as investors seek safe havens for their cash. NS&I has confirmed money has poured through their doors during July, August and September at considerably higher levels than the £4 billion typical quarterly inflow. It expects the next figures, due to be published later this month, will show a significant boost on the £86 billion it was safeguarding for investors at the end of June. It said that half of all new money is being invested in Premium Bonds.
As confidence in banks continues to be jittery, the public, it seems, is putting its trust in the unlikely prospect of a default by UK Plc. But not only are NS&I savings backed by the Government, many are tax-free, which makes them particularly appealing to higher rate taxpayers.
Their headline returns may not look exciting, but some start to sparkle when tax is added to the equation. For example, the best returns which can currently be earned in a bank or building society are around 7 per cent. This falls to 4.2 per cent for a higher rate taxpayer after tax, and to 5.6 per cent for a standard rate payer, which scarcely sets the pulse racing, with inflation soaring ahead at 4.8 per cent. >>> By Teresa Hunter | October 2, 2008
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