Premium Bonds Calculator United Kingdom

Premium Bonds are one of the UK’s most widely held savings products, with more than 20 million holders. Instead of paying interest, NS&I enters every £1 bond into a monthly prize draw. This calculator applies the current prize fund rate to your holding to estimate the average prizes you might expect over a year and a month, a statistical average rather than a promise of what you will win.

How the prize fund rate works

NS&I publishes one annual prize fund rate, 4.35% from September 2026. It is the total value of prizes paid across the scheme as a percentage of all the money held in bonds. Add up every prize, from £25 to the £1 million jackpots, divide by the total held in bonds, and you get roughly the prize fund rate. It is the return for the average bondholder, not a rate credited to your account like interest.

Why most people win less than the average

Prizes come in uneven amounts. The smallest is £25, and the £1 million jackpots and other large prizes pull the average up. Because most prizes are small and spread over billions of bonds, someone with a modest holding wins nothing in many months and usually less than the headline rate over a year. The more bonds you hold, the more entries you have each month and the closer your winnings tend to come to the advertised rate. A £50,000 holding gives a much smoother result than £1,000.

The expected return on a maximum holding

Multiply your holding by the prize fund rate for the expected annual prizes. On the maximum £50,000 at 4.35%, that is about £2,175 a year, or about £181 a month on average. On £20,000 it is about £870 a year, about £72.50 a month. These are long-run averages that smooth out the randomness any real bondholder experiences.

Premium Bonds versus a savings account

Because prizes are free of Income Tax and Capital Gains Tax, the prize fund rate is effectively a tax-free return. If your savings interest elsewhere would be taxed because you have used your Personal Savings Allowance, a taxable account needs a higher rate to match it: about 5.4% for a basic rate taxpayer and 7.25% for a higher rate taxpayer. The trade-off is certainty: a savings account pays a guaranteed rate, while Premium Bonds pay unpredictable prizes that could be nothing or, very rarely, life-changing.

A worked example

You hold £20,000 in Premium Bonds. At 4.35% the expected annual prizes are £20,000 × 4.35% = £870, an expected £72.50 a month. In practice you might win £25 one month, nothing for the next three, then £100. The £870 is the long-run average, and a smaller holder should treat it as an optimistic ceiling rather than a reliable income.

Assumptions and limitations

This is a statistical estimate, not a forecast of your winnings. It uses NS&I’s current prize fund rate, stored as a parameter and updated when NS&I changes it; the rate is variable and can go up or down at any time. The calculator assumes your whole holding is entered in every monthly draw and does not model the spread of prizes, the odds for a single bond or holding bonds for only part of a year. Actual results are random and, for smaller holdings, often well below the average shown.

About This Premium Bonds Calculator

Use this Premium bonds calculator to get an instant, accurate estimate. The figures follow official guidance and every rate and threshold is kept up to date for 2026. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.