Premium Bonds may be incredibly popular – but 14m have never won a penny in prize money

Solely a 3rd of people that maintain Premium Bonds have ever received a single prize, out of the 22 million individuals who entrust their financial savings or spare cash to the scheme run by by NS&I.

Latest knowledge reveals greater than 14m of holders, or 63 per cent, have by no means received, regardless of there being common handouts of £50 and £100, with the opportunity of additionally profitable £1m.

Many individuals use Premium Bonds successfully as a financial savings account, as tax isn’t payable on winnings and the prizes on provide may give returns higher than rates of interest in conventional financial savings accounts.

NS&I quote a prize fund price of three.8 per cent – nevertheless, there is no such thing as a assure of profitable and money left in them doesn’t earn curiosity within the conventional sense, which means its worth will decrease over time because of inflation.

A freedom of data (FOI) request, from the investor app Dodl, reveals that whereas the whole variety of prizes handed out price greater than the bottom quantity of £25 has “elevated considerably since 2022”, knowledge suggests these with larger holdings are more and more benefitting from the larger prizes.

In complete, greater than £127m is held in Premium Bonds, the place guidelines state £50,000 is the utmost anybody account could maintain.

They are saying the chances of profitable are one in 22,000 for every £1 a holder has within the month-to-month draw and notice “the extra Bonds you purchase, the extra possibilities you’ll must win.”

However the AJ Bell-owned app additional revealed what whereas the common total holding was round £5,400, the common holding for the 5.1m accounts who received a prize over the previous 12 months was effectively over £23,000 – and 80 per cent of these winners received greater than as soon as throughout the yr.

“Whereas there was a current shift to most winners receiving prizes of £50 or £100, as an alternative of the bottom £25 on provide, the overwhelming majority of profitable prizes in 2024 have been nonetheless price £100 or much less,” mentioned Charlene Younger, senior pensions and financial savings knowledgeable at AJ Bell.

“The possibility of profitable any of the highest prizes from £5,000 to £1m stays miniscule. The market remains to be flush with money accounts, together with tax-free ISAs, paying charges increased than the Premium Bond estimated prize fund price – so there’s a big sum of money making no return by any means when savers might in any other case be raking in additional than 4.5 per cent.

“In fact the lure of Premium Bonds is that you simply may win the large, £1m prize, however these figures present that it’s not possible, particularly when you’ve got a small quantity saved within the bonds.”