Premium Bonds
An NS&I savings product where instead of earning interest, your money is entered into a monthly prize draw. All prizes from £25 up to £1 million are completely tax-free.
How It Works
You buy Premium Bonds from NS&I (min £25, max £50,000). Each £1 bond is entered into a monthly prize draw. Prizes are tax-free. Your capital is 100% safe as it is backed by HM Treasury. You can also buy for children under 16.
Tax Treatment
All prizes are completely free of income tax and CGT. They do not count towards the Personal Savings Allowance or any tax thresholds.
Tax Advantages
- All prizes are completely free of income tax
- Prizes do not count towards the Personal Savings Allowance
- No need to declare winnings on Self Assessment
- Can buy for children under 16
Who Is This Suitable For?
Anyone wanting a safe, tax-free savings option. Particularly attractive for higher rate taxpayers who have used their PSA and ISA allowances.
Frequently Asked Questions
What are the odds of winning?▾
Approximately 21,000 to 1 per £1 bond per month. With £50,000 you would statistically expect around 28 prizes per year.
Can I buy for my child?▾
Yes, anyone aged 16+ can buy Premium Bonds for a child under 16.
Are they better than a savings account?▾
For higher rate taxpayers who have used their PSA, Premium Bonds can be more tax-efficient. Returns are luck-based rather than guaranteed.