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    Home»Bonds»Premium Bonds: How they work and are they worth it in 2026?
    Bonds

    Premium Bonds: How they work and are they worth it in 2026?

    February 24, 2026


    Someone with “average luck” who only occasionally wins a small prize could get a better (and more reliable) return from fixed-rate bonds offered by banks and building societies, as long as you are prepared to lock your money up for a year or more – you can find the current best rates in our savings guide.

    On the other hand, you could eclipse any interest you could possibly earn with a savings account by winning a valuable prize (but the odds are you probably won’t).

    The odds of any Premium Bonds winning a prize in a monthly prize draw is currently one in 22,000, changing to one in 23,000 from April.

    Your odds of winning a prize are determined by the prize fund rate, and how much you have invested. 

    The prize fund rate is not an interest rate, rather the average percentage growth of all Premium Bonds investors, taking in all extremes from the few people who win the £1m jackpot and the thousands of people who win nothing at all.

    Since August 2025 this has been 3.6pc, but from April it will fall to 3.3pc. For comparison, top easy-access cash Isa rates were up to 4.39pc as of February 24 2026 – so it’s not particularly competitive.

    The higher the prize fund rate, the more prizes NS&I will be handing out in each draw. The more you’ve invested, the more likely it is that at least one of your bond numbers will be picked.

    Will Premium Bonds odds worsen?

    NS&I has announced that the odds of winning will worsen from April. 

    As for whether they will continue to get worse, this will depend on the various factors that go into NS&I’s prize rate fund decision.

    NS&I sets the prize fund rate according to its funding target set by the Government; in years where it’s tasked with bringing in more money, it will set a higher prize fund rate to encourage savers to invest. In times where the target is lower, it may reduce the number of prizes on offer.

    What’s happening in the wider savings market can also have an impact. During the pandemic, when the Bank of England set the Bank Rate at an historic low, most savings providers followed suit with rock-bottom account rates. As a result, many savers turned to Premium Bonds as a better bet to make a return on their cash.

    For 2025-26, NS&I has been tasked with raising £13bn (plus/minus £4bn), increased at the Budget on November 26 2025 from the previous £12bn (plus/minus £4bn). This includes deposits for Premium Bonds and most other NS&I savings accounts, excluding its Green Savings Bonds.

    The higher funding target seems to have been outweighed by the downward trajectory of savings rates, which is expected to accelerate this year in line with further reductions to the Bank Rate.

    How much can you win each month?

    More than six million prizes were handed out in the most recent Premium Bonds prize draw (February 2026). This included two £1m jackpot prizes, 78 prizes for £100,000, and many others for £50,000, £25,000, £10,000, £5,000, £1,000, £500, £100, £50 and £25.

    The estimated prize draw in April is expected to have more than 240,000 fewer prizes.



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