Savers with Premium Bonds will have a worse chance of winning a prize as the prize fund rate is slated to decrease. The rate is currently 4.4 percent but it will drop to 4.15 percent starting from the December draw.
The likelihood of any individual £1 Bond winning a prize will also drop, altering from 21,000 to one to 22,000 to one. Consequently, there will be a reduction in overall prizes for the December draw, falling from 5,991,306 in October to 5,726,438—meaning there will be 264,868 fewer prizes up for grabs.
The total cash value of prizes will also drop, declining from £461,300,525 to £435,686,300, which is a cutback of £25,614,225 available for bondholders to win. Despite these changes, the two £1million jackpot prizes will continue to be a feature of every draw. However, other high-value awards will suffer cuts, including a reduction of five £100,000 prizes and ten £50,000 prizes.
On the contrary, the number of the smallest £25 prizes will actually increase, going up from 1,490,033 in October to 1,509,458 in the December draw.
This is the full list of the number of prizes there will be in the December prize draw, compared to October:
- £1,000,000 – 2 – remaining the same
- £100,000 – 83 (down from 88)
- £50,000 – 167 (down from 177)
- £25,000 – 322 (down from 353)
- £10,000 – 830 (down from 883)
- £5,000 – 1,664 (down from 1,766)
- £1,000 – 17,426 (down from 18,452)
- £500 – 52,278 (down from 55,356)
- £100 – 2,072,099 (down from 2,212,098)
- £50 – 2,072,099 (down from 2,212,098)
- £25 – 1,509,458 (up from 1,490,033).
December total
- 5,726,438 prizes
- £435,686,300.
October total
- 5,991,306 prizes
- £461,330,525.
Against this backdrop, financial experts are cautioning that further reductions to the prize fund rate might be coming up. Steven Kibbel, a finance expert and the chief editorial advisor at Gold IRA Companies, gave his perspective: “We’ve already seen cuts, and more could follow.
“NS&I adjusts its rates depending on a lot of factors, and they’re not immune to the economic shifts we’re all dealing with. It’s smart to keep an eye on alternatives and spread out where you put your money.
“Relying on Premium Bonds alone doesn’t cut it for most people these days. You want stability, and unfortunately, Premium Bonds just aren’t offering that right now.”
NS&I has announced further cuts to its rates, with the interest rates for the Direct Saver and Income Bonds set to drop from 4 percent to 3.75 percent from November 20. The rate for British Savings Bonds have also decreased: the Guaranteed Growth Bonds now pay 4.1 percent, down from 4.25 percent, while Guaranteed Income Bonds are at 4.02 percent, down from 4.17 percent.