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- NS&I to increase premium bond prize fund rate to 4.15% from 4.4% in December
The Premium Bond prize fund will be drastically cut from the December 2024 draw, National Savings and Investments announced.
The prize fund will be reduced from 4.4 percent to 4.15 percent from March 2024.
NS&I said the change to the prize fund was in response to a “changing savings market” as well as the need not to overshoot its net funding target, as set by the Treasury.
Grinch Move: NS&I has announced that it will reduce the premium bond prize fund rate to 4.15% from the December draw
As a result, the odds of winning a Premium bonus prize have been extended to 1 in 22,000. Previously, the odds of any £1 bonus winning a prize were 1 in 21,000.
In August 2023, NS&I increased the prize fund to a 24-year high of 4.65 percent from 4 percent, a level not seen since 1999.
But it has been falling steadily since then, with the prize fund most recently cut from 4.65 per cent in March to 4.4 per cent.
A week ago, our savings guru Sylvia Morris predicted that premium bonds could take a big hit to the budget if NS&I’s fundraising target is changed.
The number of £1 million jackpots remains the same, two each month.
But there will be fewer jackpots of £100,000 and £50,000 in December.
NS&I say there will be 83 prizes of £100,000, five fewer than the most recent draw, and 167 prizes of £50,000, down 10.
| Draw | Prize Fund Fee | Odd |
|---|---|---|
| December 2024 | 4.15% | 22,000 to 1 |
| March 2024 | 4.4% | 21,000 to 1 |
| September 2023 | 4.65% | 21,000 to 1 |
| August 2023 | 4.00% | 22,000 to 1 |
| July 2023 | 3.7% | 24,000 to 1 |
| March 2023 | 3.3% | 24,000 to 1 |
| February 2023 | 3.15% | 24,000 to 1 |
| January 2023 | 3.00% | 24,000 to 1 |
| October 2022 | 2.2% | 24,000 to 1 |
| June 2022 | 1.4% | 24,500 to 1 |
| December 2020 | 1.00% | 34,000 to 1 |
| December 2017 | 1.4% | 24,500 to 1 |
| May 2017 | 1.15% | 30,000 to 1 |
| June 2016 | 1.25% | 30,000 to 1 |
| August 2014 | 1.35% | 26,000 to 1 |
| August 2013 | 1.3% | 26,000 to 1 |
| October 2009 | 1.5% | 24,000 to 1 |
| April 2009 | 1.00% | 36,000 to 1 |
| December 2008 | 1.8% | 36,000 to 1 |
| November 2008 | 2.85% | 24,000 to 1 |
| May 2008 | 3.4% | 24,000 to 1 |
NS&I cuts income bonds for the first time in four years
As well as cutting the prize fund, NS&I announced a series of rate cuts on its savings accounts.
It will cut the rate on its Direct Savings Bonds from 4 percent to 3.75 percent starting November 20.
Income bonds will also fall from 4 percent to 3.75 percent. It is the first time NS&I has reduced interest rates on direct savings and income bonds since November 2020.
Back then, the rate was just 0.01 percent. Income Bonds have had 11 increases since then.
NS&I has announced new issues of its two-year British Savings Bonds at a lower rate of 4.1 per cent for the guaranteed growth option and 4.09 per cent for the guaranteed income option.
The best two-year bonds in This is Money’s independent best buy tables offer 4.6 per cent and are offered by Atom Bank and Union Bank of India.
Two-year bond issues went on sale again in August of this year.
Andrew Westhead, retail director at NS&I, said: “As the savings market continues to change, we need to reduce rates on some of our products to help us meet our net funding target, while ensuring we continue to balance interest rates. of our savers”. , taxpayers and the financial services sector in general.
‘Even with the changes, we still expect to pay out more than 5.7 million prizes worth more than £435 million in the December Premium Bond draw.
“Our portfolio of fixed and variable rate products, in addition to the unique position of premium bonds, continues to provide savers with the options they need to help them achieve their savings goals, backed by the security of our 100 percent guarantee of HM Treasury.”
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