Prize rates for Premium Bonds have started to drop in response to falling interest rates.
Savers have stashed more than £126bn in premium bonds, making them the most popular saving product in Britain.
National Savings and Investments (NS&I) announced today that its prize funds rate will drop from 4.4pc to 4.15pc. The odds of winning will also fall to 22,000 to one from next month.
It follows similar cuts to savings rates across the market. The average easy access account is currently offering 3.04pc, compared to 3.13pc two months ago, according to analyst Moneyfacts.
NS&I also announced rates for its Direct Saver and Income Bonds would fall from 4pc and 3.93pc respectively to 3.75pc from November.
Rates on savings bonds were similarly cut, with two-year guaranteed growth bonds and guaranteed income bonds falling by 0.15 percentage points to 4.1pc and 4.02pc respectively.
Sarah Coles, of Hargreaves Lansdown, said the Premium Bond prize rate had “finally been hit with the business end of the savings rate scythe”.
She added: “This was always going to happen eventually. NS&I has a duty not to overpay for the money it raises for the Treasury, which means the prize rate needs to be middle of the pack within the easy access savings market.
“After the Bank of England rate cut, these have been heading downhill, albeit impressively slowly, and Premium Bonds have finally succumbed.
“Of course, the prize rate doesn’t reflect what you’ll make in these bonds, and because of the lumpy way that prizes are awarded, the average person with £1,000 in bonds will still win nothing in the average month.”