Following cuts to its direct savings accounts in June, NS&I has announced that the annual Premium Bond prize fund will drop by 0.2 per cent to 1.3 per cent from 1 August 2013. This means the odds of each £1 bond number winning a prize will change from 24,000 to one to 26,000 to one.
The £1m jackpot will remain. However, according to NS&I's estimate, the number of big cash prizes worth £5,000 or more each month will fall from 181 to 109, a difference of 72 prizes. There will also be 107,447 fewer £25 cash prizes and 43,332 fewer £100 and £50 prizes.
Jane Platt, chief executive of NS&I, said: "Rates across the savings market have fallen over recent months, resulting in NS&I savings being increasingly attractive. To ensure we stay within our Net Financing target - and in light of our framework to balance the needs of our savers, taxpayers and the stability of the broader financial services sector - we need to reduce the Premium Bond prize fund rate."