NS&I slashes rates and Premium Bond prizes from May – here’s how the odds of winning big have changed
Savers will have a slimmer chance of winning some of the biggest Premium Bond prizes
MILLIONS of savers were dealt a blow this morning after it was revealed that NS&I is to cut its Premium Bond prizes, meaning bond-holders are less likely to win big.
From May 1, the total number of prizes will fall from 2,224,513 to 2,219,493, and the total value of the prizes will be cut from £69.5million to £63.8million.
The number of £100,000 prizes will fall from three to two, and the number of £25,000 prizes will drop from 11 to nine.
The £10,000 prize will be handed to 23 people from May, down from 31 this month, and 47 people could win the £5,000 jackpot, down from 58.
The cuts will affect more than 21 million Premium Bond customers.
NS&I (National Savings and Investments) said it would also be cutting rates on its Direct Isa, Direct Saver, and Income Bonds, as a result of "reductions in interest rates across the savings market", after the Bank of England base rate was cut to 0.25 per cent in August.
The changes will see a 1 per cent rate on NS&I's Direct Isa fall to 0.75 per cent, a 0.8 per cent rate on its Direct Saver will fall to 0.7 per cent and a 1 per cent rate on Income Bonds will fall to 0.75 per cent.
Steve Owen, acting chief executive at NS&I, said: "The new rates reflect current market conditions and allow us to continue to strike a balance between the needs of our savers, taxpayers and the stability of the broader financial services sector.
"We appreciate that savers will be disappointed, but we believe that the new rates present a fair offer to customers, who will continue to benefit from our 100 per cent HM Treasury guarantee on all holdings, as well as tax-free prizes for Premium Bonds."
Danny Cox, a chartered financial planner at Hargreaves Lansdown, said: "This comes as little surprise but this cut in interest rates is another devastating blow for millions of savers and the new launch of Investment Guaranteed Growth Bonds will be of little compensation.
"Ironically, with so little interest on cash for savers, Premium Bonds look more attractive - if your savings are returning basically nothing, you might as well opt for the chance of the jackpot prize."
The Sun Online has previously investigated whether Premium Bonds are worth buying and what the alternatives are for savers.
They are the most popular savings product in the UK, and more than 21 million customers collectively hold over £63 billion-worth of premium bonds – equating to around 37 per cent of British adults holding the deals.
What are Premium Bonds and how do you buy them?
The bonds are essentially a savings account you can put money into or take out money out of which have their interest rates set by a lottery.
The minimum amount you can invest to begin with is £100 and the maximum you can hold is £50,000.
Each bond has an equal chance of winning, meaning you are more likely to win the more you invest. The chance of winning a prize, with an individual bond, is 30,000 to 1.
Anyone over the age of 16 can buy them or they can be held in the name of an under sixteen by a parent or guardian.
You can buy the bonds online, over the phone, or by post. You can check online via nsandi.com or by downloading an app to see if you’re a winner.
Premium bond holders can also opt to have prizes paid directly into their bank account with notification of prize wins coming to them by email.
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