Did you know that the very first Premium Bond winner in 1957 was a woman named Mrs. J. E. Evans? She won £1,000, which back then could buy you a house in London. Today, £1,000 buys you a nice kettle and a pair of shoes. Also, the smallest prize is still £25, which has been the same since 1984. That £25 today has the buying power of roughly a tenner back then. Inflation is a thief with a grin.
Here’s another one: one in three Premium Bond prizes go unclaimed every month. That’s millions of pounds just sitting there, waiting for people to check their numbers. I picture a giant warehouse full of unclaimed £25 prizes, guarded by a bored civil servant who smells faintly of tea. Check your account, people! Your forgotten £25 could be funding someone else’s spa day.
Should you bail or hold your nose?
If you’re a high-rate taxpayer, Premium Bonds still have a weird appeal: all prizes are tax-free. For a 45% taxpayer, a 3.8% tax-free return is equivalent to a 6.9% gross rate, which is actually decent. But if you’re a basic-rate taxpayer, a regular easy-access account at 4.5% will likely beat you. Unless you’re lucky, and luck is a fickle beast.
🚨 NS&I Premium Bonds Prize Rate DOWN to 3.8%! 😱 Ditch or Keep NOW
NS&I also announced a new “Green Savings Bond” this month, paying 3.85% for three years. It’s for eco-warriors with a penchant for term deposits. But let’s be real: most people will stick with Premium Bonds because they like the occasional thrill of checking the app and seeing “You’ve won £25!”—which, let’s face it, is the financial equivalent of a dopamine hit from a scratch card.
