What are premium bonds?
Premium bonds are a savings product from National Savings & Investments (NS&I) which offer the chance of winning between £25 and £1m each month instead of paying interest.
Each £1 you invest in premium bonds is given a unique number. All the numbers are put into a monthly draw to win tax-free cash prizes.
As it’s a lottery, there is a chance you could win nothing at all – and, as your savings won’t be earning any interest, they will effectively lose value over time due to inflation.
NS&I is backed by the Treasury, so 100% of your money is safe.
- Find out more: what is National Savings & Investments?
How do I buy premium bonds?
You can buy premium bonds from NS&I online, by phone, by bank transfer or through the post.
If you already hold premium bonds, you’ll be asked for your holder’s number.
If you’ve never invested before, NS&I will check your identity and address, and you may need to provide proof of both of these.
NS&I online customers can use a new secure payment method called ‘Pay by bank account’ to top up their premium bonds and other instant-access variable rate savings accounts.
The payment option allows customers to connect directly to their bank within NS&I’s website. The advantage of the system is that it automatically fills in the customer’s NS&I account details to ensure their money reaches their account seamlessly.
Each investment must be at least £25, and you can only invest amounts in whole pounds.
The maximum investment is £50,000 – any numbers over £50,000 won’t be eligible to win prizes. If these numbers win prizes in error, NS&I has the right to reclaim the prize.
Buying premium bonds for children
You can buy bonds on behalf of children aged under 16 either online or by phone.
You do not have to be the child’s parent or guardian to do this, so the option is open to grandparents, other relatives and family friends. However, it’s important to discuss your intentions with the child’s parent or guardian first, as you will need their permission to share their information with NS&I.
If the child and parent/guardian are not already NS&I customers, they will need to provide proof of identity by posting identity documents to NS&I. The process can take up to four weeks.
The parent or guardian nominated on the application will have to look after the bond until the child turns 16.
Once the child reaches the age of 16, NS&I will send a letter detailing how the bonds can be managed. They should print and send a registration form, and may have to get their signature witnessed and sent in, too.
Once they’ve been registered, they’ll receive their own NS&I number and password, and can gain control of the premium bonds bought for them.
If you live outside the UK
If you live abroad you can apply for premium bonds by post and winnings can be paid into an international bank account.
You’ll need to send proof of identity and your Tax Identification Number. Check local regulations first, though, as not every country allows you to buy and hold premium bonds.
How much interest do premium bonds pay?
Premium bonds don’t pay any interest on the money you save – but based on your chances of winning a prize, the average amount earned is currently 3.8% (falling to 3.6% from the August draw). This is currently much lower than the interest on a top-paying savings account.
It’s worth bearing in mind that for every £1m jackpot there will be many, many people not winning anything at all – so while lucky people might earn the equivalent of 3.8% or more, the average person will earn less than this, or nothing at all.
What are the chances of winning – and who is Ernie?
Premium bonds operate in the same way as a lottery, so you could hit the jackpot or never win a single prize.
The prize fund rate has been cut significantly from highs of 4.65% in 2024; the odds of each £1 bond number winning a prize have also worsened rising to 22,000 to 1 from 21,000 to 1 before December 2024. That means each bond has less chance of winning a prize.
The winners are chosen by Ernie, the NS&I’s ‘Electronic Random Number Indicator Equipment’. Ernie is a computer that generates random numbers, which are then matched against eligible bond numbers to determine the winners.
Prizes start at £25 and go up to two £1m monthly jackpots. The total prize pool varies month by month. As you’ll see in the chart, the number of prizes dropped in December 2024 but has been gradually increasing throughout 2025.
Number of premium bond prizes
Do I have to declare premium bond prizes on a tax return?
No. Any winnings are tax-free and aren’t counted as part of your taxable income, so you don’t have to declare them.
How can I find out if I’ve won a premium bond prize?
Prize winners are normally notified in writing (or in person if they have won the £1m jackpot).
You can check for recent and ‘missed’ prizes on the NS&I website by entering your bond holder’s number and selecting which month you want to check.
If you have lost track of old bonds, there’s a free tracing service there, too.
You can choose for your prizes to be paid directly into your bank account or automatically reinvested into more premium bonds.
Are old premium bonds ignored in the prize draw?
No. All bonds are eligible for each month’s draw, regardless of their date of issue (provided you have held them for a full calendar month following the month in which you bought them). A bond purchased in 1959 won the jackpot in July 2004.
It’s true that more recent bonds win more often, but that is because there are more of these in circulation. Premium bond sales soared after the top prize was increased to £1m in 1994.
How safe are premium bonds?
NS&I is backed by the Treasury, so 100% of your original investment is safe, and you can get it back at any time.
However, you may not win enough in prize money to protect your savings from inflation.
How do I find lost premium bonds and unclaimed prizes?
With £101m in unclaimed premium bond prizes (June 2025), it’s worth checking that you haven’t missed out on a prize.
There’s no time limit for claims. NS&I attempts to contact all winners, but can only do so if it has your current contact details.
If you know your holder’s number, you can check using the online premium bonds prize checker.
If you don’t have any documentation, but believe you have some premium bonds, then you can use the NS&I tracing service. You can use the same form to check whether a deceased person had any premium bonds. It can be completed online or by post.
You will need to provide information such as date of birth, previous addresses and the name of the person who bought the bond.
Alternatively, you can use mylostaccount.org.uk to do a search.
NS&I will never deactivate a premium bond without a customer’s authority. Even if NS&I hasn’t communicated with you for years, the premium bond will remain open and will be entered into prize draws.
- Find out more: how to find lost bank and savings accounts
Can I inherit premium bonds from my parents?
Premium bonds can’t be transferred, but their value does form part of the estate of the deceased.
Executors can claim premium bond funds from NS&I by completing this claim form or by post from National Savings and Investments, Glasgow, G58 1SB.
How do I cash in premium bonds or close my account?
You can cash in some or all of your premium bonds at any time, without penalty.
If you originally applied for the bonds online or by telephone, you can simply log in to your account at www.nsandi.com or call 08085 007 007 to arrange this.
The oldest bonds will be cashed in first, and the money will be paid into your nominated bank account within around three working days.
Should I put my savings into premium bonds?
Despite the fact that they don’t offer any guarantees, and the odds of winning big are very small, premium bonds remain hugely popular.
Premium bonds offer the thrill of a flutter without the risk of losing your original stake, but they also don’t offer a guaranteed return, so aren’t suitable if you want to generate a reliable income from your savings.
Over the years, your money could be eroded by inflation if you don’t win regularly, so we wouldn’t recommend putting all of your money into them. It’s much better to spread your money across multiple savings options, including savings accounts and cash Isas, which will pay a guaranteed rate of interest.
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