Tweet
National Savings & Investments said today it was cutting its premium bond prize fund by just over 1% following the recent interest rate cut, lengthening the odds of winning a prize.
NS&I said it was reducing the prize fund rate from 2.85% to 1.8% from December 1, after the Bank of England cut interest rates by 1.5% to 3%.
The odds of winning a prize will lengthen to 36,000-1 for every £1 invested, down from 24,000-1. The group had already lengthened the odds of winning from 22,000-1 in October.
The government-backed group will continue to pay out two £1m jackpot prizes a month, but the total value of prizes will fall from £87.8m to £57m a month.
The new odds mean that someone with average luck who has the maximum £30,000 invested could win around 10 prizes a year. Under the previous odds the same sum could attract an average 15 prizes a year.
NS&I also announced a cut in returns on its income bonds of 1.3%, less than the full 1.5% interest rate cut. However, the full cut is being passed on to savers with NS&I investment accounts. The top rate of return will be reduced to 1.9% for people holding £50,000 and above, declining to just 1% for those with less than £500.
The group's cash Isa and easy access savings account will also have their rates cut, although a change to the bottom tier of the savings account means that those with less than £10,000 invested will actually see a 0.3% increase in the return they receive.
The new savings and investment rates come into force today.
guardian.co.uk © Guardian News & Media Limited 2008 | Use of this content is subject to our Terms & Conditions | More Feeds
More...
