- Just under 14.4 million current Premium Bond holders, or almost two-thirds (64%), have never won a prize*
- Around 22.5 million people hold Premium Bonds, with £126 billion sitting in these accounts, according to the latest NS&I accounts published today
- While NS&I quote a current variable prize fund rate of 4.4%, there is no guarantee of any return on your cash
- This compares to inflation-beating interest rates on cash elsewhere on the market, including the AJ Bell Dodl Stocks and Shares ISA and Lifetime ISA which offer 5.09% AER variable on cash
- 5.3 million Premium Bond holders won a prize between June 2023 and May 2024, with 80% of those winners winning more than once during that period
- The average holding for those who won was £23,047, compared to the average holding for all Premium Bond holders of £5,185
- Investing £5,185 in the Fidelity Index World global tracker fund 10 years ago would be worth £16,689 today
A Freedom of Information request obtained by AJ Bell reveals that two-thirds of Premium Bond holders, equivalent to just under 14.4 million people, have never won a prize.
Premium Bonds are held by around 22.5 million people which makes them the UK’s most popular savings product, despite the majority of Premium Bond holders never winning anything. It paints a disappointing picture for hopeful bond holders who could have otherwise stuck their money elsewhere for a more reliable and sometimes guaranteed return.
There is a whopping £126 billion sat in Premium Bonds, with the average overall holding coming in at £5,185. However, the average holding for the 5.3 million Premium Bond holders who won a prize between June 2023 and May 2024 sits at £23,047, with 80% of those winners winning more than once during that period. Over the past 12 months the average holding of someone not winning is £175, showing that those with very small balances are unlikely to win.
When you factor in that many people will have been holding Premium Bonds for decades, perhaps receiving them as gifts when they were young, that means they may have missed out on significant returns in a higher paying cash account or by investing.
Laura Suter, director of personal finance at AJ Bell, comments:
“Premium Bonds have long been a popular place for savers to stick their cash and try their luck at winning a prize in the monthly draws, yet new data obtained from a Freedom of Information request by AJ Bell reveals that two-thirds of people holding these bonds have never won a prize. Of the 22.5 million current Premium Bond holders, a staggering 14.4 million have never won.
“According to the latest figures from NS&I, £126 billion is held in Premium Bonds, meaning there is a huge amount of money making no return whatsoever when savers could otherwise be raking in interest in excess of 5% if they were to shop around for other cash products on the market.
“There have been 5.3 million prize winners in the 12 months between June 2023 and May 2024, and of those around 80% won multiple times. What's more, the average holding for those prize winners during this period was £23,047 – far higher than the average holding for all customers.
“Although the overall average holding of Premium Bond holders sits at a more modest £5,185, given there’s a pretty decent chance that amount will not win a prize, savers might be better off considering other options with their cash savings. For example, if they took more risk and invested the money instead, putting that £5,185 in the Fidelity Index World global tracker fund 10 years ago, they’d be sitting on a pot worth £16,689 today**. Of course the lure of Premium Bonds is that you might win the big, £1 million prize, but these figures show that it’s very unlikely if you have a small amount saved in the bonds.
“What these figures make clear in this extended period of higher interest rates on cash and a cost-of-living crisis is that savers will often be better off exploring the various inflation-beating cash rates on offer elsewhere in the market rather than leaving it to chance in a Premium Bonds account.”
*Based on data obtained by AJ Bell from the NS&I via a Freedom of Information request, accurate as at 23 May 2023. The number of current holders who have not won a prize is based on data from February 1994 onwards and includes new holders who were not eligible as their Bonds were not beyond one month purchased.
**Based on FE data. Doesn’t take into account platform fees.
