NS&I, the organisation that runs the range of National Savings products, has recently announced further dramatic cuts in the prize funds used for Premium Bonds.
Whilst the reduction equates to 0.2%pa it has lengthened odds of winning any prize at all from 24,000-to-one to 26,000-to-one.
This means it is more unlikely people will win.
When you remove ERNIE’s highest value prizes, the likelihood of winning prizes in line with the advertised interest rate drop further.
The cut in prize fund ties in with further cuts in interest rates to their Income Bonds, Direct ISA and Savings Accounts, which take effect from 12th September 2013.
All in all, the case for Premium Bonds and National Savings is less attractive – however in certain circumstances they can still be a useful holding.
If you are considering Premium Bonds or are unsure as to whether your existing holdings continue to represent good value then get in touch with Platinum – the chances are, we’ll be able to advise you properly.