Premium Bonds holders wait three years on average before winning a prize

Premium Bonds holders could be waiting years before ever winning a prize, meaning cash could be missing out on years of savings interest.

In 2025, first-time Premium Bonds winners waited an average of 3.1 years before they won a prize, a freedom of information request sent to NS&I by Quilter revealed.

Around one in three (29%) Premium Bonds holders who won their first prize in 2025 had been waiting for more than two years.

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There is no guarantee of winning a prize in the Premium Bonds draw, meaning your cash could lose purchasing power as inflation rises.

Money held in the product does not earn an interest rate like with traditional savings accounts. Instead, you could potentially see growth if you win in the monthly prize draws.

The odds of winning in the Premium Bonds prize fund draw will stand at 23,000 to 1 per £1 Bond number from April.

The more money you hold in Premium Bonds, the greater chance you have of winning – those who do not have a lot saved in the product are much less likely to win.

The average holding for savers who won at least one prize in any of 2025’s 12 Premium Bonds prize draws was £39,500, figures obtained by Quilter found.

Ian Futcher, financial adviser at Quilter, said: “Premium Bonds are held very close to the nation’s heart but help to underscore the scale of the cash savings problem the UK has.

“The allure of high value prizes, alongside tax free winnings, means people are putting an inordinate amount of money into Premium Bonds when they would perhaps be better off parking their cash elsewhere.”

Are Premium Bonds worth it?

With savers waiting for more than three years on average before they get any return whatsoever on the money, you might wonder whether Premium Bonds are worth it.

The answer to this question is not definitive. For some people Premium Bonds are a good option, while others may be better served by a more traditional savings account.

Premium Bonds have three key positives. Firstly, any money you win from Premium Bonds prizes are entirely tax-free, meaning what you win is what you get.

For this reason it may make sense to put money in Premium Bonds once you have used up your annual ISA allowance, such as via a cash ISA, as putting it in a taxable savings account means you risk having to pay tax on the interest earned.

This is particularly useful if you are a higher-earner who wants to put significantly more than £20,000 (the current annual ISA allowance) in cash savings each year.

Secondly, keeping your savings with NS&I is effectively risk-free.

When you keep cash with traditional banks, you run the risk of losing money if the bank goes under, if the money is not FSCS-protected. However, as NS&I is an arm of the government, any money you hold with them is effectively guaranteed to be safe as there is very little risk of total government collapse.

That means that every penny you hold in Premium Bonds is effectively 100% safe.

Finally, Premium Bonds can simply be fun. There is a certain allure to the process, with savers checking if they won a prize each month – including two £1 million jackpot payouts.

However, there are many negatives to keeping money in only Premium Bonds.

As shown above, you are much less likely to win in the monthly prize draw if you do not hold much money in Premium Bonds.

NS&I says someone with “average luck” should see their money grow by just 3.3% each year. Not only is that lower than some of the top savings accounts on the market, it is also not guaranteed as you may not win.

Ultimately, whether or not Premium Bonds are worth it depends on your particular financial circumstances.

If you have a lot of money you want to save in cash left over after using your £20,000 annual ISA allowance, Premium Bonds may be a good place to grow your cash tax-free.

But if you have just £25 to put in the savings vehicle each month, you may find you’ll grow your money faster and more reliably via a traditional savings account or cash ISA.