Premium Bond holders need nearly £40,000 just to have a realistic shot at winning a prize
Many Brits view Premium Bonds as a fun, tax-free flutter with the safety of government backing from National Savings and Investments (NS&I).
But new analysis by Quilter shows that to stand a realistic chance of winning even a small prize, savers typically need to hold nearly £40,000 in bonds – and even then, they may wait years for that first win.
According to data obtained via a Freedom of Information request from NS&I, the average holding among all prize winners in 2025 was £39,500. Even those who scooped the smallest £25 prize had an average holding of £39,817, while winners of £25,000 prizes held slightly more than £40,000 on average.
Remarkably, the £1 million jackpot winners had the lowest average holding at £37,135 – though such windfalls remain exceptionally rare.
The wait times are equally stark. First-time winners in 2025 waited an average of 3.1 years from purchasing their bonds before landing their initial prize. Nearly one in three (29%) endured waits of more than two years.
Ian Futcher, financial adviser at Quilter, which commissioned the analysis of bonds purchased since 2005, said the figures highlight the challenges of relying on Premium Bonds for meaningful returns.
“Premium Bonds are held very close to the nation’s heart but help to underscore the scale of the cash savings problem the UK has,” Futcher said. “The allure of high value prizes, alongside tax free winnings, means people are putting an inordinate amount of money into Premium Bonds when they would perhaps be better off parking their cash elsewhere.”
“Last year’s first-time winners had to wait over three years on average before they received that prize, while the average holding for prize winners in 2025 stands close to a staggering £40,000.”
How Premium Bonds work – and why the odds are long
Premium Bonds operate as a lottery rather than a traditional savings account. Savers buy £1 bonds and each bond gets an equal, random chance of winning a prize each month, ranging from £25 up to £1 million. There is no interest paid; instead, a prize fund rate determines the overall pot.
Currently, the odds of any single £1 bond winning a prize in a given month stand at around 1 in 22,000 (rising to 1 in 23,000 from April 2026). The prize fund rate is also being cut from 3.6% to 3.3% from April, only marginally above current inflation levels of around 3%.
Because every bond has an identical chance, the more bonds you hold, the higher your probability of winning. With smaller holdings, the wait for any prize can stretch into decades for many savers.
The Quilter data, covering real-world winners, shows that substantial sums are often needed before the law of large numbers starts to work in a bondholder’s favour.
Better alternatives for cash savers?
Quilter argues that for many people, especially those with short- or medium-term savings goals, actively shopping around for competitive savings accounts makes more sense than hoping for a Premium Bond win.
From April, the best three-year fixed savings accounts available via platforms like Quilter’s CashHub are offering rates around 4.1% – comfortably ahead of both the new Premium Bond prize rate and inflation.
For longer-term money, investing could deliver significantly higher growth. Quilter’s modelling shows that £10,000 in a medium-risk investment returning 5% annually could have grown by around £1,346 over the 3.1-year average wait time for a first Premium Bond win. Scaling that up to the £39,817 average holding among small-prize winners equates to potential growth of more than £5,300.
“Actively managing short-term savings via a cash platform means you can lock in real returns above inflation, rather than hold out hope you win a prize, let alone win one of the high-value prizes,” Futcher added.
