National Savings & Investments (NS&I) has come under fire following the announcement that its Premium Bond rate will be reducing by 0.20% with effect from 1 August 2013.
The provider, which is backed by HM Treasury, stated that its Premium Bond rate would fall to 1.30% with the odds of each £1 bond number winning a prize changing to 26,000 to 1 from 24,000 to 1.
The provider confirmed that the reduction in its prize fund rate will enable it to stay within the Net Financing range for 2013-14, and will "ensure a balance in the interests of investors, taxpayers and the stability of the financial services sector".
NS&I added that its Premium Bonds will still pay out around 1.7 million tax free prizes on a monthly basis, with a monthly prize fund of £49 million in August 2013.
Customers can also choose to have prizes paid directly into their bank account by BACS payment.
Premium Bonds have been offered by NS&I for many years, offering savers the opportunity to win up to £1 million, instead of paying interest.
The provider recently launched a search for the winners of unclaimed prizes, declaring that around 898,000 Premium Bond prizes remain unclaimed by customers, worth an estimated £44 million.
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