Millions of NS&I customers warned to 'cash in' Premium Bonds

Millions of NS&I customers warned to 'cash in' Premium BondsWith it taking more than three years to win your first prize on average, there are better options out there than NS&I for those

with a small savings pot, experts say.NewsJames Rodger Content Editor12:34, 04 Jun 2025With it taking more than three years to win your first prize on average, there are better options out

there than NS&I for those with a small savings pot, experts say. Millions of Premium Bonds holders have been urged to "cash in" their NS&I accounts when the rate falls below inflation. With

it taking more than three years to win your first prize on average, there are better options out there than NS&I for those with a small savings pot, experts say.

Personal finance expert Amy Knight, from NerdWallet UK, said: "The time to think about cashing in your Premium Bonds would be if NS&I’s rate falls below inflation, as this would mean your

money is losing spending power.

‌ "Currently, the Premium Bonds rate is 3.8%. The latest CPI data came out at 3.5%, so on average, Premium Bond winnings will grow holders’ cash faster enough to stay ahead of price rises."

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She said: "Another moment to consider cashing in Premium Bonds is when you have a specific savings goal in mind with a set time horizon, such as saving for an extension or a new car next

year.

Article continues below "A fixed-term or high-interest notice account could return you guaranteed interest, rather than keeping your fingers crossed for a Premium Bond prize, which may never

come."

Bonds are great for higher earning savers who have used up their £20,000 Isa allowance for the year. Basic-rate taxpayers can earn up to £1,000 a year in interest tax-free but higher-rate

payers only get an allowance of £500.

Holly Collins has won £75 in ten years of having Premium Bonds. When she was 16, Collins, now 26, put £1,000 she had saved from babysitting and birthday money into Premium Bonds on the

advice of her parents.

Article continues below "They suggested it was a good idea because it was a safe and sensible investment, and at that age that’s obviously who you listen to,” said Collins.

She told the Times: "I’d forgotten I had them, because they haven’t been the most successful investment. I’m not big on prize draws, my boyfriend is the opposite, he loves scratchcards, but

the odds of things like the lottery are so ridiculously small so I don’t tend to see the point.

“You hear stories of people winning loads, but that’s obviously not been my experience.”