NS&I’s Premium Bonds offer a brilliant fantasy to savers – that one day you may wake up and find yourself a millionaire.
Most know that this is incredibly unlikely, with over 24 million bondholders trying to grab the two £1 million prizes given out each month, but a great deal of smaller prizes are distributed each month.
In the July Premium Bonds prize draw alone, a total of over 6.2 million prizes were paid out to savers, worth almost £434 million. Around 2.2 million of these prizes were worth just £25, and over 20,000 were worth £1,000 or more.
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And what’s more, any prizes you win from the monthly draws are entirely tax-free.
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Presented like this, Premium Bonds sound like a good way to grow your cash – but the statistics paint a much more dismal picture.
Most people who have money saved in Premium Bonds have never won a single penny from the monthly prize draws as just 38% of holders make up for 100% of the wins.
That means a total of 14.3 million individuals in the UK have seen the cash saved in Premium Bonds remain entirely static as money held in savings vehicle does not earn an interest rate, leaving it vulnerable to inflation.
A freedom of information request by AJ Bell found that Brits who have never won a Premium Bonds prize have held the bonds for 8.1 years on average.
The reason the majority of people who hold the bonds have never won is because people who have a lot of money saved in Premium Bonds are far likelier to scoop prizes.
Kalpana Fitzpatrick, digital editor-in-chief at MoneyWeek, said: “The tax-free nature of Premium Bonds is attractive if you have used up your cash ISA and personal savings allowances as they can help you avoid falling into the savings tax trap.
“But if you have not yet used up these allowances then sticking all your savings into Premium Bonds may not be the best way to grow your cash as any winnings are based purely on chance.
“Instead, you could consider putting that money into a high interest savings account that guarantees your money will grow, or invest your cash to build your long-term wealth. You can keep some money in Premium Bonds in case you get lucky.”
We look at how much you need to have in Premium Bonds to increase your chances of winning in the monthly prize draw.
How much do you need to save in NS&I Premium Bonds to be likely to win?
Put simply, the more money you have in Premium Bonds, the more likely you are to win in the monthly prize draw.
For every £1 you have saved in Premium Bonds, you get one entry in the prize draw.
For example, someone who has the maximum £50,000 holding will get 50,000 entries in the prize draw, while someone who has the minimum £25 holding will get just 25 chances to win.
Data obtained by AJ Bell shows the average bond holder who has never won a prize holds just under £129 in Premium Bonds.
So, the more money you have saved, the more chances you have to win some of the prizes. However, the data suggests you need a much larger holding than you may expect to win anything.
Fewer than 1% of all Premium Bonds prizes handed out between February 2025 and January 2026 went to accounts with a holding worth less than £1,000, AJ Bell found.
Just 6% of the prizes distributed during that period went to account holders with £10,000 or less saved in Premium Bonds.
Conversely, 53% of all prizes went to those with the maximum account value of £50,000.
That means more than 90% of all prizes are being dished out to savers with over £10,000 saved in Premium Bonds, meaning you are unlikely to win prizes if you do not put a serious amount of cash in.
How can I increase my chances of winning in the Premium Bonds prize draw?
There is only one way to increase your chances of winning in the Premium Bonds prize draw, and that is to increase the amount of money you hold.
The way to maximise your chances of winning is to invest the maximum £50,000, with the data showing over half the total prizes distributed each month go to savers with accounts this size.
However, if you are unable to reach that £50,000 number just yet, the figures show that the more money you put in, the higher the likelihood of winning will become.
You can do this by putting some savings into Premium Bonds each month to gradually increase the size of your pot.
Alternatively, you are also given the option to automatically reinvest Premium Bonds winnings – that may be a good way to grow your pot too.
Where else could you put your money for guaranteed growth?
With more than half of all Premium Bonds winners having £50,000 in the savings vehicle, it raises the question of whether this is a wise choice.
On the one hand, having the maximum holding will make you much more likely to see some sort of return on your money every month, and you even have a chance to win £1 million.
But none of this is guaranteed. Even if you have the maximum Premium Bonds holding, there is still a chance you will not win a prize – those with especially bad luck may even see their cash be static for prolonged periods.
Instead, it can be a better option to put the money into a high interest savings account.
If you put £50,000 into the top savings account on the market at the moment, the Chase Saver with boosted rate, you would see your money would be guaranteed to grow by 4.5% in one year to £52,250.
While it is true that, according to the statistics, it is very unlikely that your £50,000 will stay static over the course of a year, and indeed you might win prizes worth more than £2,250, none of this is guaranteed with Premium Bonds.
Could investing make more sense than Premium Bonds?
Investing the money you hold in Premium Bonds could be a better financial decision in the long-term than keeping them in the savings vehicle.
When winning no prizes, money held in Premium Bonds is entirely static. It does not grow and starts to erode away in real terms thanks to inflation.
Conversely, money invested in a well-diversified portfolio over the long term tends to grow – though, of course, the value of your investments can go down as well as up.
The average premium bond holder who has never won a prize has £128.91 in bonds and keeps their cash in the vehicle for 8.1 years.
If they had invested the money instead into a global tracker fund for the same duration, they could have grown their money by 162% to £338.30 in the last 8.1 years, or to £13,122 with an initial investment of £5,000.
Sarah Coles, head of personal finance at AJ Bell, said: “The Premium Bonds odds are stacked against you. In any given month, each bond has a 22,000 to 1 chance of a win of any kind, and a vanishingly small chance of winning a life-changing sum of money.”
She said considering the average unlucky bond holder keeps their cash in Premium Bonds for over 8 years, it makes sense to consider investing it instead as five to ten years “is usually long enough to ride out the short-term ups and downs and take advantage of the long-term growth potential of investments.
“There will always be people who love Premium Bonds, and there will be those who have never won but still cling to the hope that their lucky day might be around the corner. However, if you’ve left money in these bonds for years, it’s worth considering how much you’ve won overall, and asking yourself whether you have kept pace with inflation, or whether your money could be working harder for you in savings or investments.”
Read our article on saving vs investing for more on how the two strategies compare.
