Premium Bonds savers who hope to take home a prize or two in the monthly prize draw will be disappointed to hear the prize fund rate for the Bonds is dropping.

The prize fund rate stands at 4.4 percent but this will be dropping to 4.15 percent from the December draw. The odds of a £1 Bond being matched with a prize will also fall from 21,000 to one, to 22,000 to one.

What this means in practice is there will be fewer prizes on offer in the draw, with the total number of prizes dropping from 5,991,306 in the October draw down to 5,726,438 prizes in the December draw, with 264,868 fewer prizes in the draw.

The total prize winnings on offer will fall from £461,300,525 to £435,686,300, meaning a decrease of £25,614,225 in winnings up for grabs.

There will still be the two jackpot prizes for £1million in each draw, but ther number of other large cash prizes is to drop.

There will be five fewer £100,00 prizes in the cash pot, dropping from 88 to 83, as well as 10 fewer £50,000 prizes, as the total falls from 177 to 167.

Curiously, the smallest individual prize in the monthly draw is for £25, and the number of these will actually increase from 1,490,033 in the October draw to 1,509,458 in the December draw.

These are how the number of prizes will change from the December prize draw, compared to October:

• £1,000,000 – 2 – remaining the same
• £100,000 – 83 (down from 88)
• £50,000 – 167 (down from 177)
• £25,000 – 322 (down from 353)
• £10,000 – 830 (down from 883)
• £5,000 – 1,664 (down from 1,766)
• £1,000 – 17,426 (down from 18,452)
• £500 – 52,278 (down from 55,356)
• £100 – 2,072,099 (down from 2,212,098)
• £50 – 2,072,099 (down from 2,212,098)
• £25 – 1,509,458 (up from 1,490,033).

December total

• 5,726,438 prizes
• £435,686,300.

October total

• 5,991,306 prizes
• £461,330,525.

One finance expert has warned there could be further cuts to the prize fund rate. Steven Kibbel, financial planner and chief editorial advisor at Gold IRA Companies, said: “We’ve already seen cuts, and more could follow.

“NS&I adjusts its rates depending on a lot of factors, and they’re not immune to the economic shifts we’re all dealing with.

“It’s smart to keep an eye on alternatives and spread out where you put your money. Relying on Premium Bonds alone doesn’t cut it for most people these days. You want stability, and unfortunately, Premium Bonds just aren’t offering that right now.”

NS&I has announced other cuts to its rates with the interest rates for the Direct Saver and Income Bonds to drop from 4 percent to 3.75 percent from November 20.

The rate for the British Savings Bonds have also fallen: the Guaranteed Growth Bonds now pays 4.1 percent, down from 4.25 percent, while Guaranteed Income Bonds are at 4.02 percent, down from 4.17 percent.