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Win more cash from Premium Bonds

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Last updated on

15 August 2010

With over £41 billion in Premium Bonds, here's how to be a winner.

The name’s Bond: Premium Bond

Despite political and religious opposition to gambling, the scheme - aimed at raising money for the nation’s coffers - went ahead. The first Premium Bonds went on sale by National Savings & Investments (NS&I) in November 1956, with the maiden prize draw following in June 1957.

Originally, the top prize was £1,000, but as Premium Bonds became more popular, both prize pots and the size of tax-free prizes increased. In 1991, the monthly jackpot hit £1 million; there were two £1 million monthly prizes between 2005 and 2009. In 19 years, Premium Bonds have created 247 millionaires.

How prizes are awarded

To show you how the prize pot is divided up, here are the results of the August prize draw:

Prize value

No. of prizes


% of total

















































As you can see, there was one £1 million winner, four winners of £100,000, nine winners of £50,000 and 16 winners of £25,000. In total, these lucky 30 people won a total of £2.25 million, or around 4.4% of the total prize pot of nearly £52 million.

However, more than four-fifths (80%) of the prize pot (over £41 million) was paid out in the form of nearly 1.7 million prizes of £25 - hardly a life-changing amount.

Easy to play, hard to win

Each Premium Bond costs £1 to buy and they are available in blocks of £10. The minimum purchase is £100, or £50 by monthly standing order. So, even people with limited means - including children - can save up and enter, in the hope of winning a cool million.

Alas, the odds are stacked against you. With 41,328,714,674 Bonds eligible for the August draw, each individual Bond had a one-in-41 billion chance of winning. So, to win the big one, you have to overcome astronomical odds.

Today, 23 million people - more than one in three Brits - own Premium Bonds and, together, we have £41 billion invested in them. Based on this month’s draw, each Bond has a one-in-24,000 chance of winning any prize, so almost all Bonds are duds.

Getting the right savings account isn’t as easy as it seems, but by avoiding these four nasty catches you won’t go far wrong

How to win with Bonds

We’ve established that it’s terrifically hard for a single bond to win even a £25 prize, never mind any of the top awards. So, what can you do to increase your chances of winning?

1. Move south

In the past two decades, a disproportionate number of the top prizes have been won by bondholders based in southern England and Greater London. So, moving south might help your luck.

2. Be female

Likewise, an unusually large proportion of the top prizes are won by women, so it pays to be a female bondholder.

3. Swap new Bonds for old

Most prizes are awarded to Bonds bought in the past six years, so it may be worth cashing in older Bonds and reinvesting in shiny new ones.

4. Buy more Bonds

You have to be in it to win it, and buying more Bonds increases your chances of landing a big prize. The maximum individual holding is £30,000, so a couple could invest £60,000.

For the record, August’s million-pound winner was a lady from Barnet (north London) who held Bonds worth £28,329. Therefore, she ticks three of the above boxes.

The truth about Bonds

Sorry, but I’ve teased you enough. In fact, the only way to win more prizes is to buy more Bonds.

This is because each prize-winning Bond number is selected randomly by ERNIE (Electronic Random Number Indicator Equipment)*, so there is no way to beat the system. Unless you can come up with a formula which predicts thermal noise in transistors, that is!

I was pulling your leg about moving home or changing gender. These will do absolutely nothing to increase your chances of winning. The simple fact is the majority of Premium Bonds are owned by rich people, who mostly live in the affluent South.

Likewise, a large proportion of Premium Bond holders are elderly people. Senior savers invest heavily in Bonds because they are backed by HM Treasury, making them 100% secure. On average, women outlive men and are more risk-averse. Thus, their large holdings of Bonds make them frequent winners.

As for swapping new Bonds for old, this is more nonsense. The simple fact is that more Bonds have been sold in the past six years than in the previous 48 years put together. Thus, newer Bonds win more prizes because there are more of them, not because they are in any way ‘luckier’. ERNIE cannot be fooled!

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The big question

Should you invest in Premium Bonds? Only you can answer this question, as so much depends on your personal attitude to risk, your tax status, and so on.

At present, the tax-free return from Premium Bonds amounts to a tiny 1.5% a year. This is worth 1.875% a year to basic-rate (20%) taxpayers, 2.5% to higher-rate (40%) taxpayers and 3% to 50% taxpayers.

With average luck, someone holding the maximum £30,000 of bonds could expect to win, say, 15 prizes a year, mostly £25 payouts. In other words, they might earn perhaps 1% to 2% while their money is completely safe, with an outside chance of a huge windfall. For some people, this is a gamble worth taking, but it’s not for me.

Finally, you can check for unclaimed prizes at NS&I. Who knows, you may have missed out on a £25,000 windfall...

If you'd prefer to put your cash into a traditional savings account, check out the lovemoney.com savings centre.

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