Are Premium Bonds worth it? Two-thirds of holders have never won a prize

Only a third of Premium Bonds holders have ever won anything from the scheme, with the vast majority never seeing a prize.

Just under 14.4 million current Premium Bonds holders, or almost two-thirds (63%), have never won, according to a Freedom of Information (FOI) request by Dodl, wealth manager AJ Bell’s investing app.

This is despite millions more £50 and £100 prizes having been handed out since 2022. The lowest amount it’s possible to win is £25, and the vast majority of prizes won were still worth £100 or less in 2024.

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Are Premium Bonds worth it?

Premium Bonds remain extremely popular for the lure of the £1 million jackpot, even though most people don’t win a prize. Around 22.7 million people hold them, with £127.7 billion sitting in these accounts at the end of 2024.

Premium Bonds provide no guarantee of returns on your cash, despite NS&I, which runs the scheme, quoting a current variable prize fund rate of 3.8%.

By comparison there are a number of guaranteed inflation-beating interest rates on cash elsewhere on the market, from cash ISAs to fixed rate bonds. The Moneybox Cash ISA, for example, is an easy access ISA paying 5.71% – while inflation is only 2.6%.

MoneyWeek regularly updates the list of best-paying savings accounts.

Bondholders who do win prizes are more likely to be repeat winners, who, unsurprisingly, hold a large number of bonds giving them more chances to win.

Just over 5.1 million Premium Bonds holders won a prize between March 2024 and February 2025, with 80% of those winners winning more than once during that period.

The average holding for those who won was £23,397, compared to the average holding for all Premium Bonds holders of £5,406.

When you factor in that many people will have been holding them for decades, perhaps receiving Premium Bonds as gifts when they were young, that means they may have missed out on significant returns in a higher paying cash account or by investing.

If instead that £5,406 had been invested in the Fidelity Index World global tracker fund 10 years ago it would be worth £14,794 today, by AJ Bell’s calculations.

Charlene Young, senior pensions and savings expert at AJ Bell, says: “The chance of winning any of the top prizes (from £5,000 all the way up to £1 million) remains miniscule.

“The market is still flush with cash accounts (including tax-free ISAs) paying rates higher than the Premium Bonds estimated prize fund rate of 3.8%, meaning holders might benefit from shopping around to make their cash work harder.”