Prizes on offer for holders of Prize Bonds are to fall in the new year as a result of the decreasing cost of Government borrowing.
While the main monthly €1m Prize Bond draw and the top prize of €20,000 for each weekly draw will continue, there will be fewer winners of €1,000, €100, and €50 prizes as there will be less money available to finance them.
In January, the NTMA, which administers the Prize Bonds scheme, is to amend the formula by which it calculates the total prize money on offer. It will mean a lower payout to Irish citizens who lend to the State.
Currently the total prize jackpot works out at 3% of the total number of bonds in issue — which at the end of 2011 was €1.45bn.
From Jan 4, the total amount of prize money paid out annually will be 2.25% of the total pot.
The changes are not likely to result in a full drop of 25% in the overall prize fund, given increased sales of bonds — recent NTMA annual reports have shown an increase in the total number of prize bonds held by the public.
An NTMA spokesman said the reduced overall jackpot reflected the general fall in interest rates across 2012, which had left the interest rates for Prize Bonds and other State savings products “out of step with the market”.
Some €311m worth of Prize Bonds were sold in 2011, while €192m were redeemed.
© Irish Examiner Ltd. All rights reserved