The odds of winning from Premium Bonds is set to drop from April 2026 once again but there are alternatives with a better chance of a prize.
Premium Bonds are one of the nation’s much loved savings products, with savers foregoing regular interest for the monthly chance of winning a tax-free cash prize between £25 to £1m.
But NS&I – who run the Premium Bonds along with other savings options – are set to have to pay out compensation worth hundreds of millions to customers over mismanagement claims.
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And research by Vanguard shows two thirds of account holders have never actually won a prize.
A freedom of information request by the asset manager revealed that of the 23 million people holding a total of £135.7 billion in Premium Bonds between them, around 14.3 million (62 per cent) have never won a single prize, let alone a big one.
Some of the above data is attributed to the small amounts of money held in many Premium Bond accounts.
But the odds of winning are set to get even worse in April when the equivalent prize rate drops from 3.6 per cent to 3.3 per cent. This will cut the level of prizes available, with the total amount dropping from around £408m to £375m.
The odds of winning will lengthen from 22,000 to one, to 23,000 to one, per £1 Bond number.
Alternatively, a traditional savings account will pay an agreed rate of interest and investing your money may attract higher returns over the long-term, which may be more appealing.
Some providers, such as TSB, occasionally run prize draws for customers or may make extra payments. For example, Nationwide often makes an annual Fairer Share payment for eligible current account, savings or mortgage customers worth £100.
And there are also alternative Premium Bond-style savings products available – where you can get better odds of winning a prize.
Read more: What are premium bonds and what are the odds of winning?
Fintech app Chip offers a Prize Savings account with £75,000 worth of prizes each month.
This ranges from £5 to a jackpot of £10,000.
There is no interest on money in the account, but instead your cash goes towards the prize draw and anything you win is added to your account.
The number of entries is decided by a saver’s average balance over the calendar month.
Odds of winning fluctuate depending on the number of accounts and the total value but last year there was a one in 964 chance of winning for every £10 held – far better than the odds of a Premium Bond win.
