NS&I to slash Premium Bonds prize fund price from March draw
- NS&I is slashing the Premium Bonds prize fund price to 4.4% from 4.65%
- The reduce will take impact from the March 2024 prize draw
- Last yr consultants warned frozen NS&I fundraising targets might sign a reduce
The Premium Bonds prize fund shall be slashed from the March 2024 draw, NS&I has introduced.
The prize fund is being reduce to 4.4 per cent from a 24-year excessive of 4.65 per cent.
In August 2023, NS&I hiked the prize fund to 4.65 per cent from 4 per cent, a degree not seen since 1999.
Axed: The Premium Bonds prize fund is being reduce from a 24-year excessive 4.65% to 4.4%
NS&I says the reduce is because of its ‘requirement to strike a steadiness between the pursuits of our savers, taxpayers and the soundness of the broader monetary providers sector.’
Premium Bonds savers won’t see odds go down they usually stay at 21,000 to 1.
At the tip of 2023, This is Money warned that savers might see National Savings and Investments reduce charges on Premium Bonds prizes, because the Treasury-backed financial institution stated it had hit its fundraising goal for the yr with an extra of £2.3billion.
Much of this money arrived from savers who ploughed into its bumper 6.2 per cent one-year repair launched in late August and pulled in early October.
Andrew Westhead, NS&I retail director, says: ‘In a dynamic financial savings market, it’s essential that our charges are set at an applicable place towards these of our opponents as we work in the direction of assembly our annual internet financing goal.
NS&I got here beneath fireplace from the financial savings business for distorting the one-year fixed-rate bonds market after launching the blockbuster 6.2 per cent Guaranteed Growth and Guaranteed Income Bonds, which no different supplier was capable of compete with.
NS&I just isn’t purported to compete with non-public banks so the one-year bonds’ abnormally excessive price in comparison with the remainder of the market was at odds with its promise to not compete with them.
After the adjustments to the prize fund, the Premium Bonds attract March is anticipated to pay out over 5.7million tax-free prizes totalling greater than £444million to savers throughout the UK.
