Premium bond payouts to be cut
If you’re one of the 22 million people in the UK with Premium bonds, prepare to abandon hopes of a windfall – National Savings and Investments are cutting the Premium Bond annual prize fund.
Party pooper Jane Platt from NS&I said that the decision was a tough one, but far below the cuts made by private sector competitors.
‘To ensure we stay within our Net Financing target – and in light of our framework to balance the needs of our savers, taxpayers and the stability of the broader financial services sector - we now need to reduce the Premium Bond prize fund rate.’ She said. ‘We agonized over the decision…it’s not something we undertook lightly.’
So what does this mean for bond holders? Well, the chance of your number winning a prize is now 26000 to 1. The money in the pot will be reduced from £57 million to £49 million and the number of prizes available will fall by 150,000.
It’s part of plan to stop Premium bonds from becoming too attractive and unbalancing the market. With interest rates for savers falling, the prize must fund fall, too.
It’s a blow for savers, but Premium Bonds are still a good bet. They’re tax free and give you better returns than a savings account. But if you’re looking for your pot of gold at the end of the rainbow, you might as well start doing the lottery. Or go on the game.