Premium Bond account holders may not ever earn a penny from the money they store away, as winnings are never guaranteed.
Premium Bonds seem attractive, but the odds might not be in your favour (Image: Getty)
Premium Bonds remain a popular way for Brits to store their savings in the hopes of winning big. However, an expert has pointed out how many UK savers have never actually earned anything. Premium Bonds are a unique way to save, and some people really like the idea of winning tax-free cash prizes from £25 up to £1 million. But how many people actually win, and how many savers let their money sit idly when it could be earning money elsewhere?
Several experts have pointed out the benefits and drawbacks of Premium Bonds. Most recently, Kalpana Fitzpatrick, digital editor-in-chief at MoneyWeek, explained why some savers might be better off putting their money into interest-earning accounts, where at least some sort of earnings are made. The advice comes as the publication revealed that 14.3 million people with Premium Bonds accounts have never won anything, as 38% of account holders make up 100% of the winners.
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For every £1 you have in your account, you get one entry into the draw. The prizes are certainly appealing, with over 6.2 million prizes paid out to savers in July’s draw, worth almost £434 million.
However, the more you have, the more entries you get. This puts savers with more to put away at an advantage.
Meanwhile, MoneyWeek reports that around 2.2 million of these July prizes were worth just £25, and over 20,000 were worth £1,000 or more.
“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,” Fitzpatrick said.
“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.”
It comes as many savings providers offer competitive rates for savers, such as the market-leading 5% from Revolut.
AJ Bell recently found that 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. If you have less in savings, an ISA might be the better option, experts have said.
The group’s study also revealed that 53% of all prizes went to those with the maximum account value of £50,000. 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.”