Money Saving Expert (MSE), the consumer finance site founded by Martin Lewis, has advised that Premium Bonds are not a worthwhile option for most UK savers, even after the prize fund rate was raised twice in recent months. In its latest newsletter, the MSE team stated that the majority of the 22 million people holding Premium Bonds could achieve better returns by placing their money in standard savings accounts.
Prize Rate Increases Still Fall Short for Typical Savers
The National Savings and Investments (NS&I) scheme allows individuals to purchase bonds worth £1 each, with a minimum holding of £25 and a maximum of £50,000. Each bond is entered into a monthly draw for tax-free prizes ranging from £25 to £1 million. The prize fund rate, which had stagnated for years, rose from 3.3% to 3.8% in June 2026 and then to 4.35% for September 2026. According to MSE, this brings the rate 'closer to top standard easy-access rates of 4.5%'.
However, MSE cautioned that 'most people with typical luck' will not see returns matching the headline rate. 'Many people often think: “I’m likely to get the prize rate (or thereabouts) – and there’s a small chance of winning a million”, but this isn’t correct,' the MSE experts explained. 'You’re actually likely to get quite a lot less than the headline prize rate (3.8% or 4.35%), and there’s a negligible chance of winning a million.'
When Premium Bonds Might Be a Decent Choice
There are exceptions, however. MSE noted that for savers who pay tax on interest and have already used their annual ISA allowance of £20,000, the tax-free nature of Premium Bonds makes them 'probably a decent choice, if you can accept the random nature of the “interest”.' Martin Lewis previously stated that 'provided you’re putting a larger amount in (as you need to do that to have a decent chance of winning closer to the published prize rate), they can be a good option.'
Additionally, MSE highlighted that Premium Bonds are backed by NS&I, which is protected by the Treasury, meaning there is 'no risk to your capital.' Yet, there is no guarantee of winning any prize, so savers could effectively 'earn nothing from putting money' into Premium Bonds.
Odds of Winning: A Statistical Breakdown
Based on the prize breakdown for September 2026, the odds of winning per £25 of Premium Bonds are as follows: £25 prize has odds of 1 in 880, with 1,717,659 winners per month; £50 prize has odds of 1 in 1,392, with 2,366,135 winners; £100 prize has odds of 1 in 2,734, with 2,366,135 winners; £500 prize has odds of 1 in 75,614, with 59,676 winners; £1,000 prize has odds of 1 in 268,433, with 19,892 winners; £5,000 prize has odds of 1 in 1,789,951, with 1,909 winners; £10,000 prize has odds of 1 in 3,894,128, with 954 winners; £25,000 prize has odds of 1 in 9,462,934, with 382 winners; £50,000 prize has odds of 1 in 22,092,896, with 192 winners; £100,000 prize has odds of 1 in 66,012,507, with 95 winners; and the £1 million prize has odds of 1 in 2,739,519,158, with only 2 winners per month.
If a saver decides to try their luck, they can place up to £50,000 in Premium Bonds tax-free, with the average yearly prize rate at 4.35%. To be eligible, individuals must be over 16, though bonds can be bought on behalf of someone younger under a parent or guardian's name. Bonds must be held for a full calendar month before entering the draw. MSE advises moving money from other savings accounts during the last week of the month to minimise time without earning interest. 'The exception to this is if you reinvest your prizes — these bonds will be in the draw from the month after you win,' the team explained.
