National Savings and Investments rate changes

NS&I (National Savings and Investments) is decreasing the interest rates on some of its variable savings offers by up to 0.20% per annum from 7 October 2008.

In recent weeks NS&I has observed an increase in sales volumes and has taken the decision to reduce rates.

NS&I's strategy is to add value for its stakeholders. The changes aim to support NS&I in meeting its annual net financing remit, maintain a consistent level of market share and to provide a positive savings experience for its customers.

The changes will result in the Premium Bond prize fund rate being reduced from 3.40% p.a. to 3.25% p.a. NS&I will continue to pay out over one million tax-free Premium Bond prizes each month, including two £1 million jackpot prizes. Any prizes won are free from UK Income Tax and Capital Gains Tax.

The odds of winning a prize with each £1 Premium Bond will remain at 22,000 to 1. and the prize band split between lower, medium and higher value prizes will remain the same.