Why it’s harder to win a cash prize in the premium bonds draw
National Savings and Investments (NS&I) reduced the premium bond prize rate for the April 2026 draw from 3.6% to 3.3%; This is the latest decline in returns on the government-backed savings product.
The Treasury-backed bank also increased the odds of each £1 bond winning a prize to 23,000 to 1, from the previous 22,000 to 1.
The popular savings product’s prize fund rate was last changed in August 2025, while the rates were last adjusted in December 2024.
The changes reduce the number of higher value rewards available. The number of prizes worth £100,000 fell from 78 in the previous draw to 71 in April. There were 143 prizes worth £50,000 and 285 prizes worth £25,000, compared to 311 prizes in March.
Read more: Were you the winner in the April 2026 premium bond drawing?
NS&I retail director Andrew Westhead said: “This change to the premium bond prize fund rate and rates 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, with rewards won since its launch in November 1956 recently surpassing £40bn.
Instead of paying interest, premium bonds offer savers the chance to win tax-free prizes through a monthly drawing funded by an annual prize fund rate. Every £1 bond purchased is entered into a draw with prizes ranging from £25 to £1 million.
Individuals, including children under 16, can hold premium bonds of up to £50,000. New purchases must be held for one full calendar month to be eligible for entry into the monthly prize draw.
Premium bonds have long been a favorite of UK savers looking for the chance to win tax-free cash rewards. But while you enjoy the excitement of the monthly prize draw, how likely are you to win and is your money really useful?
In 2025 alone, NS&I paid out over £4.95bn across 71.7m awards, making it one of the biggest payout years in history. December 2025 has been particularly busy for ERNIE (Electronic Random Number Indicating Equipment), which is used to generate the winning numbers in the UK’s monthly premium bond prize draw, generating over 6.1 million prizes worth £403.8 million.
Premium bonds are not traditional savings products because they do not earn interest. Instead, every £1 invested buys one bond, which is entered into a monthly prize draw. Prizes range from £25 to £1 million and all winnings are tax-free. The more bonds you hold, the better your chances of winning, although the prizes are chosen randomly. More importantly, the amount of bonds held has nothing to do with when or where they were purchased.
Read more: Four alternatives to premium bonds with better earning rates and savings returns
The award rate, the closest equivalent to NS&I’s interest rate, stands at 3.30% as of April 1, after reaching 4.65% in late 2023. This means that for every £100 invested, £3.3 will be awarded each year.
This rate is variable, meaning it can change in response to changes in the wider savings market or the Bank of England base rate. However, this 3.30% figure is only an average; This means that most savers will earn returns well below this level.
The first premium bonds were issued in 1957. ·PA, PA Images
The odds of winning a prize on any bond are currently one in 23,000, according to NS&I. But for savers hoping for significant payouts, the numbers tell a more serious story.
For example, if you invest £1,000 in premium bonds, you would have to wait around 3,500 years for a 50-50 chance of making £1,000. It could take over 200 years to have the same chance of winning £50. Meanwhile, it would be a staggering 3.2 million year wait before the chances of winning the £1 million jackpot are 50/50.
Even if you increase your holdings to the maximum of £50,000, the odds remain daunting. According to data scientist Andrew Zelin, who analyzed the figures on behalf of the Family Building Society, it would take around 60 years for the chance to win £1,000 to be equal, and more than 64,000 years for the chance to win the £1 million prize.
The odds of winning the £1 million jackpot in one year are one in 49,563,028.
Read more: Lower returns for savers as NS&I slashes UK Savings Bond interest rates
The 2025 figures show similar unpredictability. A jackpot winner from Cleveland won the £1 million prize with just £100; this was the second smallest prize ever to receive the largest prize. Another of December’s jackpot winners had purchased his winning bonds earlier that year, in February.
A total of 24 new millionaires will be created by 2025 and ERNIE has created 568 millionaires since the £1 million prize was introduced in 1994.
Although the chances of a life-changing victory remain slim, 2025 has also seen unusual cases; Someone in a greater London area made £100,000 in March with £14 worth of assets he bought in 1977. Another saver made £50,000 in July with £71 of assets dating back to 1962.
Premium bonds act as an easy-to-access savings account with a prize draw bonus and pose no risk to your capital as they are backed by the UK Treasury. However, since there is no guaranteed interest, your money will not increase unless you earn it; This means inflation can erode its value over time.
Read more: The best savings accounts as inflation eases
If you’re looking for a stable return on your savings, fixed-rate bonds from banks and building societies offer better rates. These accounts provide guaranteed interest if you want to lock your money for a fixed period of time; rates are currently around 4.5% with some lenders.
Mark Hicks, director of active savings at Hargreaves Lansdown, said: “Premium bonds hold a special place in people’s hearts and the opportunity to win up to £1 million tax-free acts as a great incentive to save your money. However, the odds of winning anything have also become longer, with the reward rate also reduced to 3.30%, from 22,000 to 1 to 23,000. You can get more for your money elsewhere and get more for your money elsewhere.” that you can’t.
“Premium bonds don’t pay interest – reward rates are more a measure of the average return on your money. But the truth is, if you don’t earn something, you don’t get anything. It’s worth looking at the wider savings market to see what deals are available. Cash ISA rates continue to be incredibly competitive ahead of the end of the tax year, with the market-leading outright rate of 4.3% on our Active Savings platform. Savers can also get over 4% using: Available on regular savings and cash ISA accounts in the market fixed conditions.
“For children with a long time horizon, it’s worth considering sub ISAs as an alternative. Growth and income are tax-free, as with premium bonds, but there’s real growth potential if you invest the money for five to 10 years or longer, and there’s a much better chance of your money growing much faster than inflation.”
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However, premium bonds remain extremely popular. More than 470,000 people opened new accounts in 2025, with the average opening balance being £10,674. More than 77,000 of these were for children, winning more than 1.3 million prizes collectively worth £91.7 million, including 22 millionaire children and senior winners.
You can buy these directly from NS&I in a variety of ways:
By post sending an application form to NS&I, Sunderland SR43 2SB
The minimum purchase is £25 and you must be at least 16 years old to purchase them. Parents or guardians are responsible for children’s premium bonds until they reach the age of 16.
You can reinvest your winnings up to a limit of £50,000 or have them paid into your bank account.
You can check if you are a winner through the app. Photo: NS&I
If you are lucky enough to win, NS&I will notify you by email or redeem your bonds from your online account or reward checker APPLICATION. The top winners (those lucky enough to scoop the £1 million prize) will receive a personal visit from an NS&I representative known as “Agent Million”.
In 2025, Agent Million traveled across the UK delivering news to 24 jackpot winners, visiting locations from North East Scotland to Cornwall. Norwich and Cumbria were hotspots, each producing two millionaires.
If you’ve lost track of your bonds or missed a win, you can sign up with NS&I online or by phone to update your information and check for unclaimed prizes. NS&I allows you to claim rewards dating back to 1957, when the premium pool plan began.
Overall, there are 2,754,285 pence premium bond awards worth £118 million waiting to be claimed.
NS&I also offers fixed-rate savings products, such as Guaranteed Growth Bonds and Guaranteed Income Bonds, that provide more predictable returns over a two, three or five-year term. These bonds, ranging from £500 to £1 million, are backed by the Treasury and provide full protection regardless of the amount deposited.
However, NS&I reduced the rates on these bonds, following the general trend in the savings market. Rates on the two-year Growth Bond are at 3.98%, while rates on the five-year option are at 4.05%.
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