More than 22million people hold Premium Bonds in the hope of winning a £1million prize.
The are loved by Britons for the thrill of the lottery-style prize draw which takes place each month with its promise of not one but two £1million jackpots for two lucky savers.
And also for the fact that any prizes won in the draw are completely tax free, which appeals to savers with bigger pots.
However, two in three current Premium Bonds holders – amounting to some 14.4million – have never won a prize, a Freedom of Information request to National Savings and Investments by stockbroker AJ Bell reveals.
The figure is based on prize data from February 1994 onwards, the same year the first £1million prize was introduced to the monthly prize draw by National Savings and Investments.
It also includes new Premium Bonds holders who were not eligible as their Bonds were not beyond one month purchased.
Premium Bond holders need to wait a full month before their bonds are eligible to be entered into the prize draw.
Luck of the draw: Two in three current Premium Bonds holders have never won a prize
There is a whopping £127.7billion parked in Premium Bonds, according to AJ Bell, with the average holding sitting at £5,406.
There are likely to be millions of Premium Bonds holders who hold just a few hundreds pounds – or less.
The average holding for the 5.1million Premium Bond holders who won a prize in the last 12 months comes in at £23,397, almost quadruple the average holding.
Four in five winners who won a prize in the last 12 months won more than once during that period.
Millions more £50 and £100 prizes have been dished out since 2022, and they now make up a larger proportion of winning prizes than the lowest £25 prize.
The vast majority of Premium Bond prizes were worth £100 or less in 2024.
Meanwhile, the number of higher value prizes has dipped. In April’s draw, there were four fewer £100,000 prizes from than the February draw, down from 82 to 78.
Meanwhile, there were 157 £50,000 prizes, down from 164 in February’s draw, as well as 15 fewer £25,000 prizes and 39 fewer £10,000 ones.
Charlene Young, senior pensions and savings expert at AJ Bell says: ‘While there has been a recent shift to most winners receiving prizes of £50 or £100, instead of the lowest £25 on offer, the vast majority of winning prizes in 2024 were still worth £100 or less.’
The Premium Bonds prize fund rate – the average return a Premium Bonds saver would get in a year – currently sits at 3.8 per cent, with the odds of winning a prize in the draw at 22,000 to one.
The more you hold, the more likely you are to win a monthly prize.
This does not mean that savers who keep money in Premium Bonds will get anything like a 3.8 per cent return on their savings as many may win nothing in a given year.
Instead of paying a monthly or annual interest rate, Premium Bonds holders have the chance to win monthly prizes from £25 all the way up to £1million.
But there’s a chance even the average holding won’t win a prize so savers could do better by keeping their money in a high-interest easy-access account.
NS&I cut the prize fund rate from 4.4 per cent to 4.15 December 2024. The prize fell again to 4 per cent in January 2025 before the most recent cut to 3.8 per cent.
If a saver were to keep the average holding of £5,406 in an easy-access account paying the Premium Bonds prize fund of 3.8 per cent, they would stand to earn £616 in interest over the course of a year, albeit if the rate doesn’t change.
They could do better still if they kept it in the best easy-access account which pays 4.76 per cent and could earn £669 over the course of a year.
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