NS&I Premium Bonds


An update from the Chancellor’s Budget:

Anybody invested in these before, or will consider it in light of the upcoming app?


The ‘cash’ element of my portfolio is in premium bonds. I don’t consider it an investment, more akin to ‘cash under the mattress’, except with the chance of winning something.

Interesting that people other than parents and grandparents can gift bonds to children as I’ve always wanted to buy them for my nieces and nephews.


It’s worth bearing in mind that the nearest thing Premium Bonds have to an interest rate is an annual prize rate, which means ‘on average’ the annual return is 1.4% – but in reality, this is just a vague benchmark and there’s no guarantee you’ll win anything at all.

Have you found this to be true? Has your win rate translated into an annual return of ~1.4%?

And I agree, the gifting update is also an interesting development for sure.


I have an annual return of 0%.

But I also have an annual loss of 0%… and a tiny chance to actually “win” bigger…

(Vladislav Kozub) #5

You have a net loss of 2 to 3 per cent, which you pay for the risk-free asset :wink:


So it’s essentially a lottery with no downside risk other than inflation erosion.


That’s exactly what it is.

On the contrary, my net gain is up by about 10% due to the fact it appeases my wifes desire to play the lottery :joy:


I’ve won a few small prizes this year but this works out at <1%.

I have had one year when it was over 2.5% but that was a one-off!

Yes, that what it is, plus any winnings are tax free.


I’ve had money in Premium Bonds most of my life. My parents bought them for me when I was a small child. Over a period of 30 years I won a total of £25. At one point I had over 5 figures invested and still nothing month after month. There’s a Premium Bond calculator and it states that with the maximum £50k invested, with average luck, you can expect to win £500 each year. In order to tip the odds to 51% that you’ll win a prize on a monthly basis you need to have about £17,500 invested. Even then, the odds are you’ll win a mere £25.

Inflation was at 2.7 earlier this year and it’s now sitting around 2.4. Every 4 years the money you have invested in Premium Bonds is losing 10% of its value. Premium Bonds are a good place to hold ‘emergency cash’ that you might need in the short-term. It’s easily accessible and yes you may win something (although highly unlikely) while it sits there. That’s the best view to have of Premium Bonds from my experience.

Also, Premium Bonds already have an app I’ve used it for well over a year now. It’s very basic but after each draw you press on a button to ‘show results’ and it tells you if you’ve won or not. Transferring money in to the bonds can be done online via their website and is a quick and pain free experience. I don’t think improving the ap would make much of a difference to me - It’s still the same thing it always has been.


I think you’ve described most people’s experience with Premium Bonds. FYI, I hold around £13k and have won 5 x £25 prizes this year, so I guess I’ve been a bit lucky!

As I’ve mentioned before, it’s the only cash element of my portfolio, otherwise I’d be 100% in equities, so I’m fine to lose out a bit to inflation. These are funds I would tap into if in dire emergency.

Yes, I use this and as you say, it’s very basic, The updated app will probably be fully integrated with your account and allow you to buy more premium bonds without going via their website. Like you, I’m not sure it’ll make a difference to me either as I’m not planning on buying any more.


The premium Bond calculator is here: https://www.moneysavingexpert.com/savings/premium-bonds-calculator/

If you have £13k in Bonds, with average luck, you would expect to win £150 in a year:

You’ve certainly been luckier than me but it seems your winnings fall within expected parameters overall. The next draw is tomorrow let’s hope one of us gets lucky :grinning:


Yes, fingers crossed! :smile::four_leaf_clover:#inittowinit


Have you considered Marcus by GS? With a 1.5% interest rate, you’d be looking at ~£195 for the first year & ~£175 thereafter at current rates.

Do you have £13,000 in there because you’re happy with the trade off of potentially winning big over say a guaranteed interest rate on your cash savings?

Edit: how easy is it to liquidate Premium Bonds?

(Jim) #14

I’ve got a fair few PBs and this is the big plus for me as opposed to a cash account.


Yes, this is the reason. From the calculator @PigeonStrangler posted, with average luck, I should win £150 in a year so not that far off from sticking it in a Marcus account.

Liquidating them usually takes a few days as it can all be done online.

(Jim) #16

Can anybody else match my winnings this month …



Snap! :smile::sob:


I didn’t win anything either but I never do :joy:


I had a couple of grand in them from 2005 to 2007 and made a 10% return. Absolutely lucky.

edit: typo on the year!

(Giridhar Tammana) #20

Today I won 0.25% on the amount I have, can’t really convert it to annualized return yet.