The prize fund rate for Premium Bonds is currently 3.6 percent
Premium Bonds customers have been urged to check over their holdings(Image: Getty)
Now the new year has arrived, Premium Bonds holders are being urged to review their accounts. The current prize fund rate for Premium Bonds stands at 3.6 percent, with the odds of each £1 Bond bagging a prize set at 22,000 to one. The more Bonds you hold, the higher your chances of winning, and you can hold up to £50,000 in Bonds.
However, it’s worth noting that you could go several months or even years without landing a prize. Customers who didn’t strike lucky last year might be pondering whether 2026 will bring better fortune, or if it’s time to cash in their Bonds. Aaron Peake, a personal finance expert at free credit score service CredAbility, has encouraged customers to consider whether the scheme still suits their needs.
He said: “Premium Bonds are often treated like a tradition. People buy them, forget about them and enjoy the excitement of the monthly draw. There is nothing wrong with that, but it is still worth checking whether they are working hard enough for you.
“Unlike savings accounts, there is no guaranteed return. You might win a prize, or you might get nothing at all, even after holding them for years.”
A simple question
Mr Peake suggested a straightforward test to help determine if you truly want to keep your Bonds. He advised: “Going into the new year, ask yourself a simple question. If you stripped away the fun of the draw, would you be happy with the outcome so far?
“If the answer is no, that could be a sign to review your approach. That does not mean you have to cash them all in. For many people, a mix works better.”
He suggested diversifying your savings by placing some funds into easy access accounts for immediate availability when needed. He also said you could put some of your savings into fixed rate accounts or cash ISAs.
The expert told Bond holders: “Structuring your savings like this spreads risk and gives you a better balance between certainty and chance.”
Opportunity cost
Mr Peake offered another perspective on whether Premium Bonds suit your needs. He explained: “For savers wondering whether now is the right time to cash in, it often comes down to opportunity cost.
“If savings rates elsewhere are competitive, and you have not seen much joy from the draw, moving at least some of your money could make sense. The new year is often when people set fresh goals, so aligning your savings with those plans can be helpful.”
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