Premium Bonds are a type of investment offered by the UK government’s National Savings and Investments agency. Instead of earning regular interest, bondholders are entered into a monthly prize draw for a chance to win tax-free prizes. The minimum purchase amount for Premium Bonds is £25, and each £1 invested represents one bond number. In the monthly prize draw, the total prize fund is distributed among various winning bond numbers. Those with larger holdings have a great chance of success.
That being said, there have been instances of individuals winning significant prizes with relatively small holdings. The NS&I publishes regular reports that provide information on the number of prizes and their distribution across different holding sizes. These reports can give you an idea of the winning patterns and the chances of winning with smaller holdings. You can visit the NS&I website or contact them directly for the most up-to-date and detailed information on Premium Bond winners. As you might imagine, winning the £1 million prize with a small holding is rare.
How Premium Bonds Work
The National Savings & Investment itself can trace its history back to 1861, which was when the then Chancellor of the Exchequer, William Gladstone, piloted a scheme that had actually been suggested by a banker from Huddersfield by the name of Charles Sikes. The idea of winning prizes by investing in the NS&I through Premium Bonds has been in place since the first of November 1956, when £5 million Bonds were bought the first day that they went on sale. Nowadays, you need to wait a calendar month before your Bonds are entered into the draw, whilst it was six months back then.
Premium Bonds are, in some senses, a type of gambling. The big difference between investing in Premium Bonds and spending the same amount of money with a bookmaker, though, is the fact that your ‘stake’ money will still be there at the end of the draw. Premium Bonds are an investment, with people paying money to buy Premium Bonds that then go into a savings account, but rather than getting interest on the money that is in the account, every £1 that is invested is entered into a prize draw to win prizes that can end up being as impressive as £1 million for the winner.
Nowadays, the minimum investment amount is £25, and you can purchase them online, by phone, or by mail. The prize draws are carried out monthly, with the prize fund being financed by the UK government and, as with all forms of gambling in the United Kingdom is tax-free. The size of the prize fund varies each month, and a random selection of bond numbers is chosen as winners. The number of prizes and the amounts awarded are both determined by the size of the prize fund and the odds of winning. When it comes to the latter, it is all about the total value of the Premium Bonds in circulation.
In other words, if the total value is £100 million, the odds of any individual bond winning a prize in a given month would be 1 in 100 million. This means that the more bonds you personally hold, the more chance you’ve got of winning a prize. If, for example, you had £200 worth of Premium Bonds then you’d have a 200 in 100 million chance of winning. Premium Bonds do not have a fixed term, so you can keep them for as long as you like. They are also easy to cash in and can be redeemed at any time without penalty. The downside is that your money won’t be earning interest whilst it’s sitting in your Premium Bonds account.
In terms of your chances of winning, it is obviously entirely dependent on how much you’ve got, which can be shown as follows:
| Prize Band | Prize Fund (%) | Prize Value | Estimated Number of That Prize on Offer Per Month | Odds of Winning with £1 Bond |
|---|---|---|---|---|
| Higher Tier | 10% | £1 million | 2 | 1 in 59.84 billion |
| Higher Tier | 10% | £100,000 | 56 | 1 in 2.137 billion |
| Higher Tier | 10% | £50,000 | 111 | 1 in 1.078 billion |
| Higher Tier | 10% | £25,000 | 224 | 1 in 534,289,920 |
| Higher Tier | 10% | £10,000 | 559 | 1 in 214,098,287 |
| Higher Tier | 10% | £5,000 | 1,116 | 1 in 107,240,988 |
| Medium Tier | 10% | £1,000 | 11,968 | 1 in 10,000,079 |
| Medium Tier | 10% | £500 | 35,904 | 1 in 3,333,360 |
| Lower Tier | 80% | £100 | 1,159,432 | 1 in 103,224 |
| Lower Tier | 80% | £50 | 1,159,432 | 1 in 103,225 |
| Lower Tier | 80% | £25 | 2,617,902 | 1 in 45,717 |
Obviously their percentage is the percentage of the prize fund offered to each tier, rather than each prize amount. The figures offered here were correct for the draw in January of 2023, when total prizes of £299,202,350 were paid out to 4,986,706 prize winners. It meant that the odds of winning for each £1 Bond were 1 in 24,000. The more Bonds a person held, the higher the likelihood of winning a prize within a given category would become as a result.
How the Winning Usually Goes
To give you a sense of how rare it is for someone to win a huge chunk of money with a small holding, here is a luck at a selection of the winners from May 2023. We will look at the amount they won, when the winning Premium Bond was purchased and the account’s total holdings:
| How Much Was Won | When the Winning Bond Was Bought | Account’s Total Holding |
|---|---|---|
| £1 million | January 2019 | £50,000 |
| £1 million | October 2019 | £46,525 |
| £100,000 | October 2006 | £20,004 |
| £100,000 | January 2023 | £24,000 |
| £100,000 | April 2005 | £500 |
| £100,000 | April 2020 | £50,000 |
| £100,000 | July 2001 | £2,700 |
| £100,000 | August 2020 | £17,601 |
| £50,000 | August 2004 | £50,000 |
| £50,000 | May 1996 | £6,100 |
| £50,000 | July 2021 | £12,125 |
| £50,000 | September 2018 | £30,300 |
| £50,000 | May 2010 | £9,200 |
| £50,000 | September 2008 | £100 |
| £25,000 | October 2017 | £50,000 |
| £25,000 | January 1994 | £29,991 |
| £25,000 | September 2019 | £750 |
| £25,000 | October 2009 | £200 |
| £10,000 | February 2012 | £50,000 |
| £10,000 | June 2000 | £200 |
As you can see, there is a real mix of amounts held in Premium Bonds, as well as length of time that a person has held their account for when it comes to winning a prize via Premium Bonds. Someone with £50,000 can win anything from £1 million to £10,000, with some doubtless having that much in their account and winning some of the lower prizes too.
The Low Holding Winners
Roughly one in three people in the United Kingdom has Premium Bonds. The maximum amount that can be held in an account is £50,000, which is a figure that more than a few people hold in Premium Bonds. The fact that you are not assured to win anything means that getting a prize is a positive, regardless of how small that prize is. That being said, some people do hit the big time and trigger the £1 million prize and we’re interested to learn about the people that have managed to do that with some of the smallest holdings around. Here are there stories:
The £17 Winner
Though nowadays you need to have bought at least £25 worth of Premium Bonds in order to be entered into the draw, that wasn’t always the case. In July 2004, history was made when the £1 million prize was paid out to an account with just £17 worth of Bonds. It had been bought in February of 1959 and the prize was awarded to an account holder in the London borough of Newham. It was noteworthy for two reasons, not only becoming the lowest holding ever to trigger the £1 million prize but also becoming the oldest to do so, proving that even old Bonds can see people strike it lucky.
The winner was a female Premium Bonds holder who told ‘Agent Million’, the person dispatched to inform new millionaires of their prize in person, that they couldn’t believe their luck. They said,
I’ve kept my Premium Bonds for so long and with such a small amount never in a million years did I think I’d win the jackpot. It’s such a lot of money. It’s funny to think that when I first bought my Premium Bonds in 1959, the jackpot was so much smaller, one thousand pounds I think, but because my Bonds have been in the draw for so long, my win is so much bigger.
The New Player in Devon
In August of 2021, it was confirmed that a player from Devon, who had not long been paying for Premium Bonds, got lucky and was informed that they’d won £1 million in prize money. What made it all the sweeter was that they had only been taking part in the world of Premium Bonds since July a year before. They triggered the National Savings and Investment jackpot with a holding of just £1,001. That meant that just 12 people had triggered the biggest prize with a smaller holding out of the 464 Premium Bond millionaires that had been recorded to that point.
Having triggered the £1 million prize in just the 12th draw that it was eligible to enter, the woman from Devon was something of a poster girl for the competition. The Retail Director of NS&I, Jill Waters, said,
The winner from Devon shows that, no matter how much you hold in Premium Bonds, you’re always in with a shot at winning the £1 million jackpot.
Each and every £1 Bond has an equal opportunity, which is what the magic of Premium Bonds is all about. Another win, from Wales, won with a Bond bought from a £100 prize in 2013 that they had chosen to re-invest in more Premium Bonds.