A new analysis by Octopus Money has revealed that Premium Bonds holders wait an average of three and a half years to win any prize, despite nearly a third expecting to win within six months.
How Premium Bonds work
Around 22 million people in the UK hold Premium Bonds accounts, run by National Savings and Investments (NS&I). Instead of earning interest, savers are entered into monthly draws for tax-free prizes starting at £25, with a top prize of £1 million.
Survey findings
Octopus Money surveyed 2,000 UK adults and found that the main reasons for investing in Premium Bonds are the perceived lack of risk, the tax-free status of prizes, and the possibility of a large return. However, most people never win anything, and the odds are worse for those with smaller holdings.
Over the past five years, 94% of Premium Bond jackpot winners held over £10,000, while 75% held over £25,000. Over the past ten years, £4.25 billion has been held in Premium Bond accounts that have had no activity.
Expert advice
Ruth Handcock, CEO of Octopus Money, said: "While products like Premium Bonds may work well for some, others are missing out on strategies that could grow their wealth and deliver stronger returns over time. Premium Bonds are unlikely to outpace inflation, so your money may seem 'safe', but it’s quietly shrinking in value over time."
She added: "The truth is that millions of people could be getting more from their money, but they need access to affordable, personalised advice to help them figure out what’s right for them – something that only 9% of people in the UK currently receive. Without it, they stick with what feels familiar, or they’re left in financial limbo, unsure how to take that first step."
Experts have previously suggested that a Cash ISA might be a better option, as it offers tax-free interest on up to £20,000 until April 2027.
