On average, it takes three years for holders of premium bonds to get a prize

Savers of premium bonds must wait years to receive a payout, and those with smaller holdings are less likely to do so

Holders of premium bonds might have to wait years to receive a prize, which means they might lose out on years' worth of interest savings.

According to Quilter's 2025 freedom of information request to NSandI, first-time Premium Bonds winners had to wait an average of 3.1 years to receive a prize.

Approximately 29% of holders of Premium Bonds who took home their first prize in 2025 had been waiting longer than two years.

Because there is no assurance that you will win a prize in the Premium Bonds draw. As inflation increases, your money may become less valuable.

Unlike traditional savings accounts, money held in the product does not earn interest. Instead, if you win the monthly prize draws, you might experience growth.

Starting in April, the chances of winning the Premium Bonds prize fund draw will be 23,000 to 1 per Bond number.

Your chances of winning increase with the amount of money you own in Premium Bonds; those who don't have much saved up are far less likely to do so.

According to data gathered by Quilter, the average holding for savers who won at least one prize in any of the 2025 12 Premium Bonds prize draws was 39,500.

"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," stated Ian Futcher, a financial adviser at Quilter.

"People are investing excessive amounts of money in Premium Bonds when they might be better off putting their money somewhere else due to the allure of high value prizes and tax-free winnings. The "

Do Premium Bonds Make Sense?

You may question whether premium bonds are worthwhile given that savers typically have to wait more than three years to receive any kind of return on their investment.

This question has no definitive answer. While a more conventional savings account might be more suitable for some individuals, premium bonds might be a good choice for others.

There are three main advantages to premium bonds. First off, any winnings from Premium Bonds prizes are completely tax-free, so you get what you win.

Because you run the risk of having to pay tax on the interest earned in a taxable savings account, it might make sense to invest in premium bonds after you have used up your annual ISA allowance, such as through a cash ISA.

This is especially helpful if you have a higher income and wish to save much more money annually than the current ISA allowance of £20,000.

Second, investing in NS&I is essentially risk-free.

If the funds are not FSCS-protected, you run the risk of losing money if you keep cash in traditional banks. However, since NS&I is a branch of the government, there is very little chance that the government will completely fail, so any money you have with them is practically guaranteed to be secure.

This implies that every penny you own in Premium Bonds is practically completely secure.

Lastly, Premium Bonds can be enjoyable. Every month, savers check to see if they have won a prize, including two £1 million jackpot payouts, which adds a certain allure to the process.

However, investing solely in premium bonds has a number of drawbacks.

As demonstrated above, if you have little in the way of Premium Bonds, your chances of winning the monthly prize draw are significantly reduced.

According to NS&I, a person with "average luck" should see annual income growth of only 3.3%. That is not only less than some of the best savings accounts available, but it's also not guaranteed because you might not be successful.

Whether or not Premium Bonds are worthwhile ultimately depends on your unique financial situation.

After using your 20,000 annual ISA allowance, Premium Bonds might be a good way to grow your cash in a tax-free manner if you have a sizable amount of money to save.

However, if you only have £25 to put into the savings vehicle each month, you might find that a traditional savings account or cash ISA will help you grow your money more quickly and consistently.