The real odds of winning a Premium Bonds prize revealed as millions are ‘missing out'
Premium Bond holders are waiting an average 3.5 years to win a single prize, new analysis from Octopus Money has found. In nine out of ten of these cases, this prize is worth less than £2,000.
These findings mean savings in Premium Bonds are likely to be 'quietly shrinking in value,' Octopus Money CEO Ruth Handcock says, calling into question whether this popular financial product is the best option for savers.
Millions of people in the UK now have some savings in Premium Bonds, with the government-backed scheme holding more than £127 billion across 24 million accounts.
The investment product from National Savings and Investment (NS&I) provides savers with a unique opportunity to win cash prizes rather than accrue interest as with a regular savings account.
Each month, every account holder is entered into a draw with prizes ranging from £25 to £1 million. Each £1 entered has a 22,000-to-one chance of winning, with £25 being the minimum and £50,000 the maximum.
The new analysis also reveals how much is optimal to hold in Premium Bonds to boost the chance of winning a prize. Over the past five years, 94 per cent of jackpot winners held over £10,000, while three quarters of them held over £25,000.
For those who do win prizes, it is exceedingly rare that this will be anywhere close to the top prize. In 2024, 88 per cent of prize winners won less than £2,000, while only 0.32 per cent won over £10,000.
An accompanying survey of 2,000 Premium Bond account holders found that the main reason for choosing the product is the perceived lack of risk, followed by the tax-free status of a win and the possibility of a large return.
However, over £4.25 billion has been held in Premium Bond accounts that have had no activity over the past decade. This means the money has accrued zero interest during this time, which it would have done in a regular savings account.
Ruth Handcock, CEO of Octopus Money commented: 'While products like Premium Bonds may work well for some, others are missing out on strategies that could grow their wealth and deliver stronger returns over time. Premium Bonds are unlikely to outpace inflation, so your money may seem 'safe' but it's quietly shrinking in value over time.
'The truth is that millions of people could be getting more from their money, but they need access to affordable, personalised advice to help them figure out what's right for them - something that only 9 per cent of people in the UK currently receive.
'We want to empower people with the confidence to explore options that help them achieve their long-term goals – not just rely on products that feel 'safe' or like a 'quick win' but fall short in the long run.'
An NS&I spokesperson said: 'Premium Bonds are one of the nation's favourite savings products, offering bond holders the excitement of the possibility of winning tax-free prizes each month while knowing their investment is safe and secure, backed by a 100 per cent government guarantee.
'Every Premium Bonds number has a separate and equal chance of winning a prize each month, however the more Bonds you have, the better your chances of winning, and the quicker you may win a prize.'
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