Just 920,000 savers hold more than £2 in every £5 held in Premium Bonds

More than £2 in every £5 saved into Britain’s best-loved savings product has been provided by fewer than 1million savers, This is Money can reveal.

Despite 21.4million savers collectively holding £107.4billion in Premium Bonds at the start of this month, £46.1billion of that is held by just 920,000 people who hold the maximum £50,000, according to figures from National Savings & Investments.

It means that 43 per cent of Premium Bonds are held by just 4.3 per cent of deep-pocketed savers, the Treasury-backed bank revealed.

43% of all Premium Bonds savings are held by just 920,000 people, per NS&I figures

The findings provided to This is Money come just days after it was revealed that close to three-quarters of Premium Bond holders have not won a prize in 14 years. 

If all bonds were held equally, it would mean £79.74billion worth of savings had not generated any winnings since 2007.

Each £1 bond, which can be bought in bundles starting from £25, has a 34,500 to one chance of winning any prize, from £25 to the £1million jackpot.

However, NS&I disclosed that of the 15.9milllion people who had not won in that time, 98.5 per cent, 15.66million, hold £1,000 or less.

Given each bond has a 34,500 to one chance of success, holding more bonds means a greater chance of success. 

In the most recent draw at the start of this month, two in five of all winners of £5,000 or more were bonds which were part of a holding of £50,000.

However, savers with smaller sums do still win, even if the odds are longer. One overseas holder won £5,000 this month having held £425 of bonds, while someone from Manchester won £5,000 with a holding of £1,002.

In total, 3.1million prizes worth £89.8million were handed out this month.

Premium Bonds Winners

Prize Area Value of bond
£1,000,000 Surrey £10,000
£1,000,000 Wiltshire £30,000
£100,000 Surrey £50,000
£100,000 York £40,000
£100,000 Devon £5,000
£100,000 Cambridgeshire £500
£100,000 Staffordshire £10,000
£50,000 Somerset £15,000

More May 2021 winners

View list of May 2021 winners

James Blower, an adviser to savings banks and the founder of The Savings Guru, said: ‘Although each £1 bond has the same chance of winning, the reality is that unless you hold £30,000 – £50,000, then your odds of winning anything each month aren’t good. 

‘As the stats uncovered show, most of the prizes go to those with maximum holdings. Someone with the average £5,000 holding could quite easily go all year without winning a single prize.’

Premium Bonds have become increasingly popular among those savers who have had more money to set aside over the last 14 months since the country’s first lockdown. The amount held in them has risen by more than a fifth between March 2020 and this month to £107.4billion.

Despite a cut to the prize fund rate last December and a reduction in the number of prizes, billions has continued to pour in as savers fancy chancing their arm rather than settle for low savings rates elsewhere.

Someone with £16,000+ saved in Premium Bonds is likely to average around a prize every other month so, unless you have this level of savings, then my advice is to look at other savings products.

James Blower, The Savings Guru 

And savings lotteries have become an increasingly popular choice among banks and building societies at a time where very few pay savers good rates.

Britain’s largest building society Nationwide this week announced its fourth lottery since February 2020, which will pay out £1million a month and can be entered with just £1.

James Blower added: ‘Someone with £16,000+ saved in Premium Bonds is likely to average around a prize every other month so, unless you have this level of savings, or are completely comfortable with taking a gamble that your savings may not generate any return at all, then my advice is to look at other savings products. 

‘Those with smaller savings balances, or spare cash monthly, should consider regular savings accounts as an alternative. Coventry Building Society pay 1.05 per cent on amounts of £1 – £500 per month, for example.’

Savings accounts

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