Each Premium Bond has an equal chance of winning a prize
Premium Bonds go into a monthly draw(Image: Getty)
NS&I has published figures about Premium Bonds prizes. Customers have been urged to check over their accounts now as the new data emerges. Premium Bonds are a unique savings scheme where customers’ bonds are entered into a monthly draw instead of accruing interest.
The monthly prize draw offers prizes ranging from £25 to a £1million jackpot, with two £1million prizes up for grabs in each draw. Each £1 Bond has an equal chance of winning a prize, with the current odds standing at 22,000 to one. NS&I has published some statistics regarding the number of prizes awarded over the past year.
In 2025, the group distributed 71,722,056 prizes, amounting to a total value of £4,950,616,350. Savers across the country celebrated £1million wins, from North East Scotland to Cornwall. Norwich and Cumbria were particularly lucky, with two £1million prizes each.
You can win big prizes in the monthly Premium Bonds draw(Image: Getty)
The savings scheme has been especially popular among younger savers. Out of the 470,660 new Premium Bonds accounts opened over the past year, 77,177 were set up for under 16s.
One child saver even bagged one of the £1million jackpots. Sarah Coles, head of personal finance at Hargreaves Lansdown, said that while Premium Bonds remain a highly popular savings product, customers should consider whether they are still the right choice for them.
You are likely to lose money
She explained: “People are incredibly attached to their Premium Bonds, but as we move into 2026, it’s well worth taking stock of whether they’re right for you. When people win a prize on their Premium Bonds they get more than just the money, they also feel a sense of getting something for nothing, which is a powerful incentive to stay put.
You can win £1million in the monthly Premium Bonds prize draw(Image: Getty)
“However, in reality, you’re actually paying for the prizes yourself, because your cash doesn’t earn any interest. Given the fact that the average bond holder will win nothing in the average month, it means your savings are likely to lose money after inflation.”
The latest inflation figures came in at 3.6 per cent for the year to October 2025, meaning that without any prize wins and with your holdings remaining static, customers are losing out in real terms.
Ms Coles warned that this erosion of value only compounds the longer you have your bonds. The financial expert said: “Families buying for children could see the real value of the bonds shrink considerably over the years.
“Given that the average account balance for new customers in 2025 is £10,674, there’s the potential to lose a significant chunk of your spending power.”
Changes to Premium Bonds
The prize fund rate for Premium Bonds has been axed on multiple occasions throughout the past year. The prize fund rate currently stands at 3.6 per cent, as of August this year.
The rate stood at 4 per cent at the beginning of the year, having fallen from 4.15 per cent compared to December 2024. The rate then dropped in April from 4 per cent to 3.8 per cent, before falling again to the present 3.6 per cent following the August draw.
The prize rate reached its peak at 4.65 per cent in September 2023. Nevertheless, the financing target for the current tax year for NS&I, which is set by the Government, has been raised from £12billion to £12billion.
This development may discourage rate setters from applying further reductions to the prize rate, in the immediate months ahead.
Which alternative savings accounts to Premium Bonds are worth looking at?
Should you be thinking of withdrawing from the scheme, Ms Coles suggested that now is an ideal time to look at better alternatives. She said: “As we head into the new year, it’s worth considering whether you’re still happy with the deal, or whether you’d prefer the certainty of a strong rate in the wider savings market.
“Check what’s available from online banks and saving platforms, where you’ll usually find competitive deals. For children with a long time horizon, it’s also essential to consider Junior ISAs as an alternative.
“Growth and income is tax free, like with Premium Bonds, but if you invest the money for five to 10 years or more they have real growth potential, and stand a much better chance of growing notably faster than inflation.”
You can contribute up to £9,000 annually into junior ISAs. A benefit of ISAs is that any interest earnings or investment growth within an ISA wrapper remains completely tax-free.
NS&I says on its website Premium Bonds offer a chance to win tax-free prizes from £25 to £1 million. They say they also offer easy access to your money and can allow people to buy a savings gift for a child under 16
