Tuesday, 23 July 2013

NS&I Cuts the Premium Bond Prize Fund

YAHOO! FINANCE: The prize fund available to Premium Bond holders is being slashed and the odds of winning will drop to from 24,000 to one to 26,000 to one next month. What's more, the annual interest rate on the entire savings pot will drop from 1.5% to 1.3%.

The changes will come into effect from 1st August, National Savings & Investments (NS&I), the Government organisation behind the bonds, confirmed today.

Lower chances of winning

As the overall prize fund is being reduced, there will be a smaller chance of winning on the Premium Bonds.

In July, the total value of the tax-free prizes was £57,099,325. This is predicted to fall to £49,321,500 in August.

And the total number of prizes will drop to 1,751,061, from 1,903,314.

NS&I says the change is happening because of falling interest rates on savings accounts. This has led to an increase in demand for the bonds and has put NS&I in danger of taking in more money than it needs to support the government's borrowing. » | lovemoney.com | Tuesday, July 23, 2013