Premium Bond account holders may never earn a penny from their savings, as winnings are never guaranteed. According to MoneyWeek, 14.3 million people with Premium Bonds accounts have never won anything, with 38% of account holders claiming 100% of the prizes.
How Premium Bonds Work
For every £1 saved, account holders receive one entry into a monthly prize draw. Prizes range from £25 to £1 million, all tax-free. In July 2026, over 6.2 million prizes worth nearly £434 million were paid out. However, over 2.2 million of those prizes were just £25, and only 20,000 were worth £1,000 or more.
The odds are stacked against smaller savers. AJ Bell found that fewer than 1% of prizes between February 2025 and January 2026 went to accounts with holdings under £1,000, while 53% of all prizes went to accounts with the maximum £50,000 balance.
Expert Advice
Kalpana Fitzpatrick, digital editor-in-chief at MoneyWeek, said: "The tax-free nature of Premium Bonds is attractive if you have used up your cash ISA and personal savings allowances. 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."
She recommended high-interest savings accounts, such as Revolut's market-leading 5% rate, or investing for long-term growth. "You can keep some money in Premium Bonds in case you get lucky," she added.
Odds Are Against You
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."
For savers with less than £1,000, experts suggest an ISA may be a better option, as it guarantees growth and avoids the tax trap.
