27 March 2026
While Premium Bonds are seen as a safe and tax efficient place to park your cash, the reality is consumers are having to wait inordinate amounts of time just to receive their first prize.
Figures obtained by wealth manager Quilter via a freedom of information request discovered that in 2025, first time winners had to wait on average 3.1 years before receiving their first prize. The data also highlighted that one in three (29%) of Premium Bond holders who won their first prize in 2025 had a wait of over two years.
The data captures all bonds purchased since 2005, when NS&I began to fully record the date bonds were bought.
Each £1 Premium Bond purchased has the same chances of winning a prize worth between £25 and £1m, with consumers able to pay in a minimum of £25 and a maximum of £50,000. This means that the larger the holding, the greater the chance you have to win a prize.
For all those that won at least one monthly prize in 2025, the average required holding stood at £39,500, highlighting the size of pot needed to give your bonds the best chance possible to win a prize.
Indeed, those winning a £25 prize in a monthly draw in 2025 had an average holding of £39,817, with £25,000 prize winners having the largest average holding of over £40,000. This data does not consider the frequency of those wins, however, as the average bond holding would include, for example, people who have won a prize each month, or multiple of the same prize in any given draw. The £1m jackpot prize saw the lowest average holding but this still stood at £37,135.
While Premium Bonds remain an attractive option for cash savings due to their tax-free nature, Quilter is highlighting that consumers could potentially be better served on two fronts.
From April, the Premium Bond prize rate will be cut from 3.6% to 3.3%, marginally above inflation which stands at 3% today. For short- and medium-term savings, therefore, consumers may be better off utilising a cash management platform with access to a range of competitive savings accounts on the market, and that can be managed through a single account. The latest best three-year savings account on the Quilter CashHub currently offers 4.1%.
Meanwhile, for longer term savings, Quilter is urging people to consider investing provided their financial situation allows it. While people should invest for a minimum of five years, £10,000 in a medium-risk investment (5%) return could have returned £1,346 during the same three-year average wait for a first Premium Bond prize win in 2025. Furthermore, the average Premium Bond prize holding of £39,817 in the same investment could have returned £5,316 over that three-year period. Even greater returns are potentially on offer for higher-risk investors and if held for five years or more to benefit from the power of compounding returns.
Ian Futcher, financial adviser at Quilter, said: “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. The allure of high value prizes, alongside tax free winnings, means people are putting an inordinate amount of money into Premium Bonds when they would perhaps be better off parking their cash elsewhere.
“Last year’s first-time winners had to wait over three years on average before they received that prize, while the average holding for prize winners in 2025 stands close to a staggering £40,000. In that time, and provided their financial situation allows, significant gains could be made by investing and offers a much greater potential to grow wealth than Premium Bonds can.
“Even for shorter-term cash there are more options available. The Premium Bond prize rate is being cut at the same time as fears around a fresh inflation spike grow. Actively managing short-term savings via a cash platform means you can lock in real returns above inflation, rather than hold out hope you win a prize, let along win one of the high value prizes.”
