Premium Bonds savers have been warned of their slim chances of winning prizes, as new data reveals that a large proportion of holders have never received any returns on their investments.
Despite holding a significant amount of money in these bonds, many individuals are seeing little to no benefit. The odds of winning remain high, and NS&I has further reduced the prize fund rate, which now stands at 3.8%. This change makes it even more difficult for savers to secure substantial rewards.
According to Manchester Evening News, this trend highlights the growing skepticism around Premium Bonds as a viable savings tool.
Two-Thirds of Premium Bonds Savers Never Win
A report from wealth management firm AJ Bell revealed that two-thirds of Premium Bond holders have never won any prize, equating to 14.4 million people holding bonds with no returns.
Despite the average saver holding £5,406 in bonds, the likelihood of winning any prize is low, with odds standing at 22,000 to one.
Even if a saver wins, the chances of receiving a large prize are minimal. Data from a Freedom of Information request shows that £50 and £100 prizes now outnumber £25 prizes in the pool.
Yet, the majority of prizes awarded in 2024 were for £100 or less, making the odds of winning big money very small.
The allure of Premium Bonds versus better alternatives
Charlene Young, a senior pensions and savings expert at AJ Bell, highlighted that savers could potentially earn higher returns elsewhere.
The chance of winning any of the top prizes (from £5,000 all the way up to £1 million) remains minuscule – she said.
The market is still flush with cash accounts (including tax-free ISAs) paying rates higher than the Premium Bond estimated prize fund rate of 3.8%, meaning holders might benefit from shopping around to make their cash work harder.
She continued,
According to NS&I, £127.7 billion is held in Premium Bonds, meaning there is a huge amount of money making no return whatsoever when savers could otherwise be raking in more than 4.5% if they were to shop around for other products on the market.
Ms. Young reiterated that savers might find better returns elsewhere, stating,
There’s a chance even the average holding won’t win a prize, meaning savers might be better off considering other options with their cash rather than leaving it to chance in a Premium Bonds account, particularly over the long term.
For instance,
If they took more risk and invested the money instead, putting that £5,406 in the Fidelity Index World global tracker fund 10 years ago, they’d be sitting on a pot worth £14,794 today, even despite the recent market falls.
Between March 2024 and February 2025, 5.1 million prizes were awarded, with 80% of winners securing multiple prizes. However, these repeat winners held significantly larger amounts in Premium Bonds, averaging £23,397—far above the average saver’s £5,406.
