Tweet
The chance of winning prize money with premium bonds has plummeted in the last year, following cuts in the Bank of England's base rate, figures revealed last night.
The prize fund has been halved from £114m a year ago to £57m for the 20 million people who own the tax-free, but non-interest paying bonds, and over the past year the total number of winners has dropped 600,000 to 1.1million. The amount in the prizefund is based on the equivalent of a month's interest on the value of the bonds invested, and the Bank's base rate has been cut three times, from 5% to 2%, since the start of October. Monthly prizes range from £50 to £1m. Starkly, whereas last January 531 people won prizes of more than £1,000, last month only 26 did. A year ago 29 people won £50,000 prizes and 14 won £100,000, but this month there will be only one award for each amount, as well as two £1m prizes. Those with £1,000 in bonds this time last year had a 43% chance of winning, now reduced to 28%.
Angela Mason, spokeswoman for National Savings and Investments which runs the scheme, said: "The rate of return on premium bonds, as with other savings products, is influenced by economic circumstances. Given the historically low levels base rate has now reached, we are looking closely at all the options available to us so that we can make the right decision for all premium bond holders.
"People invest in premium bonds for different reasons. This may be for the chance and excitement of winning large prizes, or many regular tax free prizes or because premium bonds are simple to manage and can offer easy access to their investment."
guardian.co.uk © Guardian News & Media Limited 2009 | Use of this content is subject to our Terms & Conditions | More Feeds
More...
