Do you remember the thrill of opening a letter from NS&I, heart racing as you wondered if you’d finally snagged the jackpot? Nowadays we check an app – different and maybe not quite so exciting but hey. For years, Premium Bonds have held a special place in Britain’s financial folklore — part savings account, part national lottery, and part conversation starter over Sunday lunch.
But here’s the million-pound question (quite literally): are Premium Bonds still the golden ticket or at least a risk free way of saving or investing, or are they becoming more of a faded relic from another time?
Let’s dive in — and what I found may surprise you.
£106 Million in Forgotten Prizes
First, the shocker. There’s currently £106.6 million worth of Premium Bond prizes unclaimed. Yes, you read that right. That’s 2.63 million prizes, including 11 whopping £100,000 jackpots, just sitting there gathering dust.
Why? People move house, forget to update their details, or simply never check the prize draws. Imagine finding out your “lucky” £100 gift from Gran had quietly won thousands — but no one told you because your account is linked to an old address. Ouch.
Tip: if you’ve ever owned Premium Bonds, go to NS&I’s Prize Checker app or website. Who knows — you might already be a winner.
Falling Returns — And Falling Out of Love
Here’s the harder truth. Premium Bonds are not quite the moneymakers many of us fondly imagine. The prize fund rate dropped again in August, now at 3.6%, down from 3.8% in spring and 4% at the start of the year. That’s a steady slide — and it matters, because it reduces the average return across the millions of savers.
And the odds? They’re long. For every £1 bond you hold, you have a 22,000-to-1 chance of winning anything in a given month. Which explains why 63% of Premium Bond holders have never won a penny.
A recent report showed that many winners have chunky balances of around £23,400, while the typical non-winner has about £106 invested. Translation? If you’ve only got a handful of bonds, you’re more likely to be hit by a falling piano than get a prize cheque.
The Cost of “Playing It Safe”
The romance of Premium Bonds is real — but so is the cost of clinging to them.
Take the Walkers, a couple who maxed out with £50,000 each. Over four years, their “returns” averaged just 2%. Meanwhile, their cash ISAs were quietly delivering 3.5%, and their stock market investments grew by 25%. The difference? Roughly £40,000 left on the table. I invite you to read this sentence a few times over. Then think about the rate of inflation – the percentage amount that erodes your money… Are bonds worth it? Are Cash ISAs worth it? What does NOT investing cost you?
The difference between the Cash ISA or Bonds to investments is not small change. That’s a car, a kitchen refit, or several once-in-a-lifetime holidays. Maybe not in one year – but over time…
But Wait — There Is a Case for Bonds
Let’s be fair. Premium Bonds still have their appeal. They’re 100% backed by the UK government (unlike private bank accounts, which only protect up to £85k — rising to £110k later this year). They’re tax-free. And they carry that little flutter of excitement — the “you never know” factor that makes them feel less boring than a savings account.
For risk-averse savers, especially those already sitting on big cash balances elsewhere, Premium Bonds can still play a role. Think of them as the safe, steady uncle in the family: not thrilling, but reliable.
Smarter Ways to Save (and Still Sleep at Night)
So, what’s a saver to do? Here’s a balanced approach:
Check for unclaimed prizes. Do it today — please. You might be richer than you think.
Keep a Peace of Mind Fund. Three to six months of essentials in easy-access cash. That’s your safety net.
Look beyond Bonds. High-interest cash ISAs currently offer up to 5%. Stocks & shares ISAs, with time on your side, average closer to 7–10% over the long haul.
Play the Premium Bond game if you enjoy it — but know the odds. Treat it as fun, not as a wealth-building strategy.
Final Thought
Premium Bonds are like that old family board game: nostalgic, comforting, and sometimes still fun to play. But if you’re serious about building wealth, they’re not to be looked at as the main event.
The world has moved on. Inflation eats away at money sitting idle. Opportunities exist elsewhere. And while no option is risk-free, doing nothing is the riskiest choice of all.
So don’t just settle for the fantasy of a jackpot. Take charge. Reclaim your unclaimed prizes. Explore alternatives. And make sure your money is working as hard for you as you’ve worked for it.
Because in the end, financial wellbeing isn’t about luck. It’s about leadership — yours.
Premium Bonds in 2025: The Cheeky Lowdown
There’s a whopping £106.6 million in unclaimed prizes (including 11 jackpots of £100k!) — check before you cry into your tea.
63% of holders have never won a sausage. Yes, never.
Odds of winning per £1 bond each month: 22,000 to 1 — slightly better than being struck by lightning, but worse than finding a fiver in your jeans.
Average balance of winners: a chunky £23,400.
Average balance of non-winners: a lonely £106.
Prize fund rate has slumped to 3.6% (down from 4% in January).
Safe as houses though: NS&I is 100% backed by the government.
Thank you for your time given to reading this.
You can reach me at www.fannysnaith.com