Premium bonds have been around since as early as 1956 and millions of people all over the UK have some money tied up in the investment bonds, but the prize rates for those who win are reducing.

Premium bonds are the UK’s most popular form of savings product and instead of a traditional account which pays regular, guaranteed interest; people who have purchased premium bonds have their money entered into a monthly draw and are in with the chances of receiving bonuses on their investment.

However, as of May 2017, National Savings & Investment (NS&I) are reducing the total prize fund rate from 1.25% to 1.1% and as a result, the number of people who win the higher rates are set to dwindle.

The total number of winners who receive the maximum £1,000,000 return will stay the same, although the number of prizes that are £25,000 or less in value are set to fall each month.

£25 is the lowest figure that can be won through a premium bond prize and there is expected to be 5,020 less winners when the changes come into play. The odds of winning will remain at 30,000 to 1.

According to Steve Owen, acting chief at NS&I, they have “taken the time to absorb the impact of reduction and subsequent changes across the savings market.

The new rates reflect current market conditions and allow us to continue to strike a balance between the needs of our savers, taxpayers and the stability of the broader financial services sector.”

It is reported that the reductions come as a result of the Base Rate reduction from the Bank of England from 0.5% to 0.25%.

While it is still worthwhile in investing your money in premium bonds, the reduction in prizes will no doubt be off-putting for some bond holders.