National Savings and Investments (NS&I) has cautioned its 22 million Premium Bonds holders not to rely on the product as a guaranteed source of income. Although Premium Bonds are a favored savings tool backed by the government and offering the chance to win monthly tax-free prizes, experts emphasize that winnings are far from guaranteed.
Andrew Hagger, founder of MoneyComms, explains, “While mathematically the larger your holding, the better your odds of winning, there is no promise you’ll actually win anything. Most bond holders understand that the odds of landing one of the two £1 million jackpot prizes each month are extremely slim.”
Savings expert Anna Bowes from Private Office adds, “Those with smaller holdings have an even lower chance of winning, but since two people win the jackpot every month, that’s the main attraction of Premium Bonds.” She also stresses, “If you rely on interest income from your savings, Premium Bonds are not dependable.”
READ MORE: Dudley Street Neglected Amid Rising Fly-Tipping, Drug Use, and Rat Infestation
READ MORE: Aston Villa Urged to Keep Morgan Rogers Amid Arsenal and European Interest
Each £1 bond enters a monthly draw where prizes range from £25 up to £1 million. The prize fund is based on a rate applied to all bonds held, reflecting the combined amount eligible for prizes. Since April 1994, the jackpot has stood at £1 million, with two jackpots awarded monthly.
Notably, the annual prize fund rate will rise to 3.80% for the July 2026 draw, improving the odds to 1 in 22,000 for each £1 bond to win a prize.
NS&I’s Retail Director, Andrew Westhead, comments: “We continuously review our products to align with market conditions and are pleased to increase rates across five variable savings accounts. This helps meet our Net Financing target while offering Premium Bonds holders enhanced prize fund rates and better odds. Premium Bonds provide a secure, tax-free, and flexible savings option backed by HM Treasury with the excitement of monthly prize draws.”