Why it’s harder to win a cash prize in the premium bonds draw
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National Savings and Investments (NS&I) will cut the Premium Bonds prize rate from 3.6% to 3.3% from the April 2026 draw, in the latest reduction to returns on the government-backed savings product.
The Treasury-backed bank will also lengthen the odds of each £1 bond winning a prize to 23,000 to 1, from the current 22,000 to 1.
The prize fund rate on the popular savings product was last changed in August 2025, while the odds were last adjusted in December 2024.
The changes will reduce the number of higher-value prizes available. The number of £100,000 prizes will fall from 78 in the most recent draw to an estimated 71 in April. There will be 143 prizes worth £50,000, down from 154, and 285 prizes worth £25,000, compared with 311 in February.
Andrew Westhead, NS&I retail director, said: “This change to the Premium Bonds prize fund rate and odds reflects changes in the wider savings market, and ensures we continue to balance the interests of savers, taxpayers and the wider financial services sector.”
NS&I said Premium Bonds remain the UK’s most popular savings account and recently passed £40bn in prizes drawn since their launch in November 1956.
Instead of paying interest, Premium Bonds offer savers the chance to win tax-free prizes through a monthly draw funded by an annual prize fund rate. Each £1 bond purchased is entered into the draw, with prizes ranging from £25 to £1m.
Individuals can hold up to £50,000 in Premium Bonds, including children under the age of 16. New purchases must be held for one full calendar month before being eligible for entry into the monthly prize draw.
Premium Bonds have long been a favourite for UK savers looking for a chance to win tax-free cash prizes. However, while they offer the excitement of a monthly prize draw, how likely are you to win, and is your money really working for you?
In 2025 alone, NS&I paid out over £4.95bn across 71.7 million prizes, making it one of the biggest payout years on record. December 2025 was particularly busy for ERNIE (Electronic Random Number Indicator Equipment) — the machine used to generate the winning numbers for the UK’s monthly Premium Bonds prize draw — generating over 6.1 million prizes worth £403.8m.
Premium Bonds aren’t traditional savings products because they don’t earn interest. Instead, each £1 invested buys a bond, which is entered into a monthly prize draw. Prizes range from £25 to £1m, and all winnings are tax-free. The more bonds you hold, the better your odds of winning, though prizes are randomly selected. Importantly, the amount of bonds held has no bearing on when or where they were purchased.
The prize rate — NS&I’s closest equivalent to an interest rate — is 3.60% since August 2025, after peaking at 4.65% in late 2023. This means that for every £100 invested, £3.6 in prizes is awarded each year. The prize rate will go down to 3.3% from April.
This rate is variable, meaning it can shift in response to changes in the broader savings market or the Bank of England base rate. However, this 3.3% figure is just an average, meaning most savers will experience returns far below this level.
First Premium Bonds draw in 1957. ·PA, PA Images
According to NS&I, the current odds of winning a prize with any single bond are one in 22,000, climbing to 23,000 to one from April. But for savers hoping for significant payouts, the numbers tell a more sobering story.
For instance, if you invest £1,000 in Premium Bonds, you’d have to wait around 3,500 years for a 50-50 chance of winning £1,000. To have the same odds of winning £50, it could take over 200 years. Meanwhile, a 50/50 chance of winning the £1m jackpot would require a staggering wait of 3.2 million years.
Even if you max out your holding at £50,000, the odds remain daunting. It would take around 60 years to stand an even chance of winning £1,000, and over 64,000 years for a shot at the £1m prize, according to data scientist Andrew Zelin, who analysed the figures on behalf of the Family Building Society.
The chance of winning the £1m jackpot over the course of a year is one in 49,563,028.
The 2025 numbers show similar unpredictability. One jackpot winner from Cleveland won the £1m prize with a holding of just £100, the second-smallest ever to scoop the top award. Another of December’s jackpot winners had bought their winning bond earlier the same year, in February.
In total, 24 new millionaires were created in 2025, and since the £1m prize was introduced in 1994, ERNIE has now created 568 millionaires.
While the chances of a life-changing win remain slim, 2025 also saw unusual cases – someone in Outer London won £100,000 in March with a holding of just £14, purchased in 1977, and another saver won £50,000 in July with a holding of only £71 dating back to 1962.
Premium Bonds function as an easy-access savings account with the bonus of prize draws, and they come with no risk to your capital as they are backed by the UK Treasury. But since there’s no guaranteed interest, your money doesn’t grow unless you win — meaning inflation can erode its value over time.
If you are looking for a steady return on your savings, fixed-rate bonds from banks and building societies offer better rates. These accounts provide guaranteed interest if you’re willing to lock your money away for a fixed term, with rates currently around 4.5% at some lenders.
Mark Hicks, director of active savings at Hargreaves Lansdown, said: “Premium Bonds hold a special place in people’s hearts with the opportunity to win up to £1m tax free acting as a great incentive to pile your money in. However, the odds of winning anything just got even longer, from 22,000 to one to 23,000 to one, with the prize rate also being slashed to 3.30% — it serves as a timely reminder as to whether you can get more for your money elsewhere.
“Premium Bonds don’t pay out interest — their prize rate is more of a benchmark of average return for your money. However, the reality is that, if you don’t win anything, you don’t get anything at all. It’s well worth looking at the wider savings market to see what deals are available. Cash ISA rates remain incredibly competitive ahead of tax year end with the market leading outright rate available on our Active Savings platform at 4.3%. Savers can also get above 4% by utilising fixed terms which are available across regular savings and cash ISA accounts in the market.
“For children with a long time horizon, it’s also well worth considering 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 there is real growth potential, and your money stands a much better chance of growing notably faster than inflation.”
That said, Premium Bonds remain extremely popular. In 2025, more than 470,000 people opened new accounts, with an average opening balance of £10,674. Of these, over 77,000 were for children, who collectively won more than 1.3 million prizes worth £91.7m, including 22 child millionaires and high-tier winners.
Via post by sending an application form to NS&I, Glasgow G58 1SB
The minimum purchase amount is £25, and you must be at least 16 years old to buy them. Parents or guardians are responsible for children’s Premium bonds until their 16th birthday.
You can reinvest any winnings up to the £50,000 cap, or have them paid out to your bank account.
You can check if you’re a winner through the app. Photo: NS&I
If you’re fortunate enough to win, NS&I will notify you by email, or you can check your bonds through your online account or the prize checker app. The biggest winners — those lucky enough to scoop the £1m prize — will be visited in person by an NS&I representative known as “Agent Million”.
In 2025, Agent Million travelled across the UK to deliver news to the 24 jackpot winners, visiting locations from North East Scotland to Cornwall. Norwich and Cumbria were particular hotspots, each producing two millionaires.
If you’ve lost track of your bonds or missed a win, you can register with NS&I online or by phone to update your details and check unclaimed prizes. NS&I allows you to claim prizes as far back as 1957, the year the Premium Bond scheme began.
Overall, there are 2,677,306 premium bonds prizes worth £111m waiting to be claimed.
NS&I also offers fixed-rate savings products like Guaranteed Growth Bonds and Guaranteed Income Bonds, which provide more predictable returns over two-, three-, or five-year terms. These bonds, available from £500 to £1m, are backed by the Treasury, offering full protection regardless of how much is deposited.
However, NS&I cut rates on these bonds, following a general trend in the savings market. Rates for the two-year Growth Bond currently stands at 3.98%, while the five-year option now offers 4.05%.
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